Gold and silver were showing strong morning gains on the first U.S. trading day of 2012. Positive reports by the U.S. Census Bureau and Commerce Department on estimated November construction spending — up a seasonally adjusted 1.2% from October to $807.1 billion — and by the Institute of Supply Management buoyed precious metals and mining stocks.

A widely followed measure of economic activity and conditions in the U.S. manufacturing sector, the ISM’s Purchasing Manager’s Index increased for the 29th consecutive month in December, while overall economic activity increased for the 31st consecutive month, according to the latest Manufacturing ISM Report on Business, released today.

December’s PMI was up 1.2 percentage points from November’s 52.7%, “indicating expansion in the manufacturing sector for the 29th consecutive month,” according to ISM chairman Bradley J. Holcomb. New orders were up 0.9 percentage points in December, while prices of raw materials were down 2.5 percentage points from November.

Spot gold was trading 2.36% higher at noon Tuesday, with a bid price of $1,603.30 per ounce and an ask price of $1,604.30. Spot gold traded as high as $1,608.40 and as low as $1,585.40. The London afternoon reference price fix came in at $1,598, according to Kitco market data.

Spot silver was surging higher, up over 6.2%, bid at $29.59 per ounce with an ask price of $29.69. The morning high as of time of writing was $29.86, and the low was $28.48. Tuesday’s reference price was set at $28.78 in the London a.m.

Gold had recouped the 5% it had lost last week before slipping back to $1,592 an ounce in London morning trade, according to BullionVault‘s London Gold Market Report. The Tokyo and Shanghai markets were closed for New Year holidays, though other Asian markets moved higher in Tuesday trading based on a strong December rebound in China’s non-manufacturing output.

“Gold is a unique hedge against the debasement of all fiat currencies,” Gresham Investment Management’s Douglas Hepworth told Financial Times. “However, in a period where you’re not having stagflation but stagnation … it will do badly.”

Phillip Futures Singapore’s Ong Yi pointed out that “gold is still trading on risk appetite, rather than acting as a safe haven.”

Turning to exchange trading, gold and silver trusts were sharply higher.

• The SPDR Gold Trust (NYSE:GLD) was showing gains of more than 2.4%.
• The iShares Gold Trust (NYSE:IAU) was up over 2.5%.
• The iShares Silver Trust (NYSE:SLV) was up more than 6.4%.

Gold and silver miners’ ETFs were showing strong gains.

• The Market Vectors Gold Miners ETF (NYSE:GDX) was around 3.6% higher.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was up some 4.75%.
• The Global X Silver Miners ETF (NYSE:SIL) was 4% higher.

Gold mining shares were up sharply as well, with NovaGold Resources‘ (AMEX:NG) shares surging.

• Agnico-Eagle Mines (NYSE:AEM) was showing gains of around 3.6%.
• Barrick Gold (NYSE:ABX) was up nearly 3.4%.
• Eldorado Gold (NYSE:EGO) was up 4%.
• Goldcorp (NYSE:GG) was some 2.3% higher.
• Newmont Mining (NYSE:NEM) was up around 2.85%.
• NovaGold Resources was between 5.5% and 6.2% higher.

Silver mining shares were surging higher.

• Coeur d’Alene Mines (NYSE:CDE) was moving higher, up around 3.75%.
• Hecla Mining (NYSE:HL) was up nearly 5.75%.
• Pan American Silver (NASDAQ:PAAS) was nearly 2.5% higher.
• Silver Wheaton (NYSE:SLW) was showing gains of nearly 4.5%.
• Silver Standard Resources (NASDAQ:SSRI) was up more than 5.6%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.