Gold Follows Stocks Higher

Gold prices were rallying Friday and following the strength in the broader equity markets.

December-dated bullion contracts were jumping $8.40 at $682.30 an ounce in recent New York futures market action.

The exchange-traded funds that hold stores of gold bullion, streetTracks Gold Shares(GLD Quote) and iShares Comex Gold Trust(IAU Quote), were both up over 1%.

"As this subprime problem and credit crunch have emerged, we believe funds have been liquidating positions across all markets, including gold," says Andy Montano, director of precious metals at the Toronto-based bullion bank ScotiaMocatta. "That's seems to be working in reverse now."

Other metals were also climbing. Benchmark copper contracts were tacking on 6 cents at $3.41 a pound, while silver was adding 26 cents at $12.22 an ounce.

The iShares Silver Trust(SLV Quote), which holds bars of silver, and the PowerShares DB Base Metals (DBB Quote), which tracks prices of industrial metals including copper, were gaining more than 1%.

Analysts at UBS in London cut their outlook for silver prices, noting that the high price volatility for the metal isn't being offset with greater potential for gains.

"We see no reason to own silver," they write in a recent market brief, saying the lack of prior price performance may have undermined investor sentiment.

"Silver's nasty habit of sharply falling during corrections in precious metals may have resulted in serial cardiac arrests for silver bulls," they add.

Elsewhere, wheat prices were charging ahead again, up 2.6% at $8.05 a bushel. Cocoa futures were ahead by $33 at $1,827 a ton.