There may have been some delayed reaction to the declining dollar and rising crude prices, or a correlation with equities markets which were off sharply (the Dow dipping briefly below 8000) before staging a late monster rally.

Analysts have no way of knowing just what they’re seeing.

Dale Doelling, chief market technician at Trends In Commodities said that “if this rally is able to sustain itself, the Dow should rally to at least the 9,500 level and I expect gold to be able to rally back above the $900 level.” But, “This is all dependent upon what happens tomorrow. If this ends up being a one-day event, all bets are off.”

There’s even a little guarded optimism out there.

“Markets, all of them, seem to be acting as if the hedge fund liquidation may have hit a cataclysmic bottom,” said Ned Schmidt, editor of the Value View Gold Report.

“With the Federal Reserve pumping funds as fast as they can, gold has extremely good fuel for a run higher [in] 2009,” Schmidt added.

But pessimist Dennis Gartman, editor of the Gartman Letter isn’t budging. “The gold market is telling us that deflation has ravaged the base metals, the soft commodities, the grains,” Gartman says, and also “telling us that depression is possible and even likely, and that deflation is the order for the day.”

Source: Gold, silver rocket up in after hours -  Surging equities help