Commodity exchange traded funds tracking gold and oil jumped Monday along with global equities as risk appetite recovered following a seven-day down streak for U.S. stocks. A weaker dollar helped fuel the gains.

U.S. Oil Fund (NYSEArca: USO) rallied 3.5% in premarket dealings following reports Eurozone leaders are considering closer fiscal ties in an effort to calm the sovereign debt crisis. In precious metals ETFs, SPDR Gold Shares (NYSEArca: GLD) rose 2% while iShares Silver Trust (NYSEArca: SLV) tacked on 3%.

The rally carried gold prices back above $1,700 an ounce. “What appears to be going on is that there are clear moves within Europe and a recognition that some sort of closer fiscal integration is necessary. Quite how you get to it from where we are now, I think remains very difficult,” said Nic Brown, analyst at Natixis, in a Reuters report.

“Gold is currently continuing to behave more like a risky asset than a safe haven in times of crisis,” Commerzbank said in a MarketWatch report. “In our opinion, this is attributable to the behavior of futures-market players who feel less pressure to sell as their risk aversion declines.” [Short Gold ETFs Boosted by Precious Metals Weakness]

In currency markets, the euro strengthened against the greenback. PowerShares DB US Dollar Index Bullish (NYSEArca: UUP) fell 0.8% in preopen trading Monday.

U.S. Oil Fund

Full disclosure: Tom Lydon’s clients own GLD and SLV.

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