Gold prices surged Monday along with equities on hope that drastic action by France and Germany can save the Eurozone from its two-year-old sovereign debt crisis.

French and German officials worked feverishly over the weekend so they could unveil plans for a fiscal union before a European Union summit on Dec. 9. Significantly, the plans include giving the EU power to reject national budgets that fail to meet budgetary limits.

We are working intensively for the creation of a Stability Union, the German Finance Ministry said in a statement. That is what we want to secure through treaty changes, in which we propose that the budgets of member states must observe debt limits.

Support for fiscal integration has grown as the cost for many nations, including France and Belgium, have hit Eurozone-era highs.

European stocks soared on prospects that contagion from the crisis will not envelop France and other Eurozone members. France's CAC 40 stock index closed up 5.5 percent, and Germany's DAX gained 4.6 percent.

In the U.S. stocks also rose. In late afternoon trading the Dow Jones Industrial Average climbed 285.14, or 2.5 percent, to 11,516.92, the Nasdaq Composite rose 78.87, or 3.2 percent, to 2,520.38 and the S&P 500 added 32.24, or 2.8 percent, to 1,190.91.

The dollar fell against a basket of major rivals by 0.66 percent to 79.31. Earlier in the session, the greenback was down as much as 1.6 percent. The yen also fell.

The euro rose the most in two weeks.

Sean Lusk, a Chicago-based market analyst with PFGBEST, said many investors, particularly those outside the U.S., were short covering or buying on the dips that emerged last week.

I think a lot of the move was overnight, said Lusk. As of last night we were already $30 dollars higher. A lot of it is a risk-off trade. We've had some better-than-expected news from Europe.

Gold gained $25.10 to $1,710.80, a 1.4 percent gain, while spot gold added $4.52 to $1,710.48.

Silver rose $1.15 to $32.16, a 3.7 percent gain, while spot silver increased 44 cents to $32.21.

The big jump in the price of silver combined with the stock market rally to boost shares of silver mining companies.

in midday trading, Endeavour Silver Corp. soared 9.5 percent, Hecla Mining Co. shot up 6.8 percent, Alexco Resource Corp. jumped 6.7 percent, Great Panther Silver Ltd. added 6 percent, Coeur d'Alene Mines Corp. was up 5.5 percent and Mag Silver Corp. rocketed up 11.2 percent.

Silver exchange-traded products also posted big gains. Global X Silver Miners gained 5.8 percent, iShares Silver Trust rose 3.7 percent and Sprott Physical Silver Trust soared 8 percent.