[Following are excerpts from the current issue of the Weekend Update at Iacono Research. To learn about the services provided as part of this investment newsletter click here and to begin a subscription before rates rise sharply next month click here.]

A stronger euro and a weaker dollar have worked wonders for the once-thought-dead gold bull market and silver turned in its most impressive weekly performance in almost three months as the world continues to marvel at the surging demand for precious metals in China, a trend that could accelerate as policy makers there shift from fighting inflation to spurring growth.

For the week, spot gold rose 1.7 percent, from $1,639.70 an ounce to $1,667.00, as silver surged over the $30 an ounce mark, rising 8.2 percent from $29.77 an ounce to $32.20. Gold is now up 6.4 percent for the year, but down 13.3 percent from its high last summer, while the silver price is up 15.6 percent in 2012 but remains 34.9 percent below its early-2011 peak.

The late-2011 surge in Chinese gold imports discussed here last week made its way into a featured Wall Street Journal story($) on Wednesday in what was a very favorable take on the subject. I’ve always considered the Wall Street Journal to be the most even-handed mainstream financial media outlet when it comes to gold as an investment and the positive closing comments indicate to me a growing acceptance of this theme:

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[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

Many analysts thought a death knell sounded for the gold bull market last month. However, driven by surging investment demand in China, as evidenced by record-high imports from Hong Kong, and the recapturing of the 200-day moving average, the gold price added to its gains from the first week of the year, while silver mounted an even bigger surge.

All this occurred despite a stronger trade-weighted dollar (that normally moves opposite of metal prices). However, credit downgrades late on Friday and an expected further decline for the euro are sure to test the recent enthusiasm for precious metals in the days ahead.

For the week, the gold price rose 1.4%, from $1,616.60 an ounce to $1,639.70. Silver briefly topped the $30 an ounce mark for the first time in a month, before ending slightly below that mark. That’s up 3.5% from $28.75 an ounce to $29.77. Gold is now down 14.7% from its high last summer while the silver price remains 39.9% below its early-2011 peak.

Surging Chinese gold demand and soaring premiums in advance of the Lunar New Year were by far the dominant stories for precious metals last week. The Hong Kong Census and Statistics Department reported a record 103 tonnes of gold entered the mainland from Hong Kong in November, up from 86 tonnes in October as shown below via Reuters.

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Having come across the name Suki Cooper many times in the last year or so while reading what investment banks have to say about the gold price and, being a fan of HBO’s True Blood, it was kind of interesting to see what someone named “Suki” actually looked like.

The Barclay’s analyst makes the same points that gold market naysayers were ignoring last month – that none of the underlying factors that drove the gold price to its 2011 heights have gone away, most importantly strong physical demand from Asia and real short-term interest rates that will be negative for years to come.

Here’s a ginormous infographic from numbesleuth.org with all kinds of interesting details about the barbarous relic gold that, suddenly last week, seems to have come alive again after limping to the finish in 2011 (click on the image to enlarge).

From: Number Sleuth