Gold rose near a seven-month high in London as equity markets dropped on concern the global economy is worsening, lifting demand for the precious metal as a haven. Silver and platinum also gained. Gold reached $987.71 an ounce two days ago, the highest since July 15, as investors sought a store of value and bullion holdings in exchange-traded funds soared to records. Stocks in Europe and Asia retreated today, sending the MSCI World Index lower for a ninth day. “It’s the global crisis making investors go to safe-haven buying of gold,” Afshin Nabavi, a senior vice president at MKS Finance SA, one of Switzerland’s four bullion refiners, said by telephone from Geneva. “Gold is acting on its own and only as a safe haven for investors, ignoring all fundamentals.” Gold for immediate delivery gained as much as $7.96, or 0.8 percent, to $982.61 an ounce and traded at $978 an ounce at 9:04 a.m. local time. April futures added $5, or 0.5 percent, to $981.50 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange. The metal, heading for a second weekly gain, is up 11 percent this year, compared with a 15 percent loss in the MSCI World Index. Bullion reached a record $1,032.70 in March. Investors have increased gold holdings as central banks cut interest rates and boost spending to help revive economies. Gold in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, climbed to a record 1,028.98 metric tons yesterday, placing it just behind the 1,040 tons held by Switzerland, the world’s sixth-largest stockpile. ‘Obvious Target’ “Given the economic downturn and currency depreciation, $1,000 is an obvious target for gold,” London-based broker Marex Financial Ltd. said in a report. Gold “will be likely to keep its momentum in the coming week.” Among other metals for immediate delivery in London, silver added 1.2 percent to $14.2025 an ounce. Platinum rose $9.50, or 0.9 percent, to $1,078.50 an ounce, and palladium was 0.1 percent higher at $216.25 an ounce.

Source