Gold for December delivery is up $27.80 or 1.6% to $1,715.50 an ounce in electronic trading on Globex. It's trading just off a pre-market high of $1,720.
The rally in gold prices came as the dollar index, which tracks the performance of the greenback against a basket of other major currencies, dropped 1% to 78.819. The dollar is falling as investors march back into the euro amid signs of progress toward a debt resolution there.
European officials have agreed on how to leverage a key rescue fund, while Germany and France are looking at how to deepen fiscal integration in the euro zone, according to news reports.
Debt talks boost confidence in the global economy, which feeds demand for commodities.
Silver futures also climbed, with the December contract up $1.05, or 3.4%, to $32.06 an ounce.
January crude is up $2.97 or 3% at $99.74 a barrel in electronic trading.
United States Oil Fund ( USO ) is up 3.5% at 38.46.
SPDR Gold Trust ( GLD ) is up 1.9% at 166.50.
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