Merger news and strong demand from Europeans lifted gold and silver prices Monday, as well as shares of companies that mine the precious metals.
The increased prices mirrored gains in the broader stock market, which also rose on merger activity as well as optimism that Europe may be making progress in keeping the most fiscally weak members of the Eurozone from defaulting.
"The prices (of gold and silver) still continue to be a reflection of global issues," said Peter Thomas, director of business development for PFG Precious Metals. "We are seeing tremendous amounts of money, larger than ever before, coming from Europeans. Europeans are very concerns they are going to see their paper money become worthless."
Investors woke up Monday to several big acquisitions: Google Inc.'s announcement it was paying $12 billion in cash for Motorola Mobility; Time Warner Cable Inc. saying it will pay $3 billion cash for cable operator Insight Communications Co. Inc.; and Toronto-Dominion Bank buying a Canadian credit-card portfolio from Bank of America.
Deal making signals to investors that corporations that have been sitting on large piles of cash may be starting to put that cash to work.
In afternoon trading, the price of spot gold rose $22.16 to $1,760.66 and the price of silver rose 31 cents to $39.53.
Shares of gold and silver mining company also climbed. Gold miners AngloGold Ashanti Ltd. added $1.55, or 3.5 percent, to $45.37 and Kinross Gold Corp. increased $61 cents, or 4.6 percent, to $16.31. Among silver mining companies, Coeur d'Alene Mines Corp. was up $1.36, or 5.3 percent, to $27.07 and Silver Standard Resources Inc. was higher by rose $1.29, or 4.9 percent, to $27.69.
The S&P 500 was up 17.11 to 1,195.92