NEW YORK (MarketWatch) -- Gold futures surged more than 6% Friday, poised for their biggest weekly gain in two months, as wary investors returned to the safety of the precious metal. Other metals also moved broadly higher.
Gold futures rallied $46.30, gaining 6.2% to $795 an ounce on the Comex division of the New York Mercantile Exchange. The benchmark contract was poised to end the week up more than 6%, the biggest weekly percentage gain since the week ended Sept. 19.
The metal topped $900 an ounce in September after the collapse of Lehman Brothers. But it has since seen roller-coaster dives that sent gold below the $700 mark in October, as banks and funds liquidated their precious-metal assets for much-needed cash in the face of the credit crunch.
Recent gains in gold indicate that investment interests may have returned, analysts said.
"The metal benefited from the return of safe-haven investment demand," said James Moore, a precious metal's analyst at TheBullionDesk.com.
Gold is now more than 10% higher than its October low. But comparing with its record high above $1,000 hit in March, the metal is still down more than 20%.
Peter Spina, editor at GoldSeek.com, said a break above $750 an ounce could quickly send gold prices toward -- and potentially above -- $800.
U.S. unemployment rate will reach 9%, from 6.5% currently, by the end of 2009 and the economy will shrink in each quarter until mid-2009, said economists at Goldman Sachs on Friday.
If unemployment reaches that level, it would be "unequivocally the worst single downturn on record since World War II," analysts at the investment bank said in a note.
Silver seen rising
Returning investment interests are also expected to push up silver prices within the next few months, GFMS Ltd, a precious metal's consultancy, said in a report late Thursday. The firm predicted silver prices to average at around $13 next year.
December silver jumped 6.4% to $9.61 an ounce.
In currencies trading, the dollar fell against the euro and the British pound. But the dollar index , which tracks the value of the greenback against its major rivals, still rose due to appreciation against other currencies.
Gold prices and the dollar tend to move in opposite directions.
Holdings in the SPDR Gold Trust , the largest gold exchange-traded fund, stood at 752 tons on Thursday, unchanged from a day ago, according to the latest data from the fund. The SPDR Gold Trust rose 5.5% to $77.49.
In gold spot trading, the London gold-fixing price -- used as a benchmark for gold for immediate delivery -- stood at $758.50 an ounce Friday morning, down $20.50 from Thursday afternoon.
In other metals trading, December palladium rose 2.5% to $184 an ounce, and January platinum added 3.5% to $818 an ounce. December copper added 2.5%, with the benchmark contract for the industrial metal rising to $1.6155 a pound.
