NEW YORK ( TheStreet ) -- European leaders finally decided on some kind of plan to lift Europe out of an almost two year old debt crisis and investors voraciously bought up stocks and gold.

Gold for December delivery closed $24.20 higher at $1,747.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,749 and as low as $1,707.20 an ounce while the spot gold price was popping $19, according to Kitco's gold index.

Silver prices jumped $1.80 to close at $35.11 an ounce while the U.S. dollar index was tanking 1.74% at $74.89.

Although details are still being hammered out, Greek bondholders will take a voluntary 50% haircut on bonds. Greece can also borrow an additional 30 billion euros from the bailout fund to partly insure new bonds. European banks will have to raise 106 billion euros by June to protect against losses and the bailout fund could be leveraged to as much as 1 trillion euros.

The news was enough to lead investors into stocks and also into safe havens like gold.

Gold prices had rallied almost 7% in four trading sessions and some mild profit taking weighed on prices, but as the euro continued bouncing, the dollar tumbled and gold zoomed higher for a fifth consecutive session. Traders were also reluctant to abandon the metal when there are still so many questions marks surrounding Europe's solution to its debt crisis.

"We still see further upward potential for gold," wrote Commerzbank in a morning note, "as the crisis is not yet fully resolved and there are still substantial risks."

"Gold over $1,700 is positive," says George Gero, senior vice president at RBC Capital Markets, "and now needs confirmation for higher open interest, higher moving averages and higher closing prices."

Martin Murenbeeld, chief economist at DundeeWealth, still thinks that the European Central Bank and the Federal Reserve will be forced to pump more money into the system to stabilize their respective economies.

"The more liquidity that is put in the system, the higher goes the gold price," he said. Murenbeeld also says the U.S. dollar is fundamentally weak, which means central banks might want to diversify out of dollars into gold. That trend has already been seen as central banks have become net buyers of gold rather than net sellers.

Murenbeeld says that central banks could collateralize their gold. PIIGS -- Portugal, Ireland, Italy, Greece and Spain -- collectively own 3,000 tons of gold. Italy, which owns the most at 2,400 tons, has a history of using gold as collateral. "I don't think the gold will come on the market but that it will be collateralized." Tongue and cheek, Murenbeeld speculates this could be a way to get China interested in helping Eurozone countries, swapping gold for cash.

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