Gold rose for the first day in three, paring its worst weekly performance in more than four months, as concern the world economy will falter stoked demand for haven investments. Immediate-delivery gold gained as much as 0.9 percent to $1,754.93 an ounce, and traded at $1,745.75 at 10:50 a.m. in Singapore. The metal is down 3.6 percent this week, the biggest drop since the period to May 6, as investors sold the metal alongside global equities and other commodities. “Gold has been caught up in the overall flight to the exit, but in a normal, sensible world, we should expect to see some support from the fear and trepidation investors are facing,” Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd., wrote in an e-mail. Global stocks entered a bear market for the first time in more than two years, oil touched a six-week low and copper slumped to the lowest level in a year on concerns about an escalating debt crisis in Europe and a possible recession in the U.S. The Federal Reserve said Sept. 21 there are “significant downside risks to the economic outlook,” driving the dollar to a seven-month high against a six-currency basket yesterday. The world is on the eve of the next financial crisis, said Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., which runs the biggest bond fund. December- delivery bullion in New York, which tends to trade inversely to the dollar, rose as much as 0.9 percent to at $1,757.90 an ounce, after losing 3.7 percent yesterday, the most in a month. Quarterly Performance Gold, up 16 percent since the end of June, is still heading for its best quarterly performance since 1986, after reaching a record $1,921.15 an ounce on Sept. 6, as investors seek to hedge against other depreciating assets and central banks look to diversify reserves. Bullion held in exchange-traded products was little changed at 2,236.068 metric tons yesterday, data compiled by Bloomberg show. The holdings reached a record 2,298.4 tons on Aug. 8. Central banks, the biggest holders in the world, have been net buyers of the metal for the first time in a generation. Russia’s central bank increased its gold reserves to 27.2 million troy ounces last month, from 27 million at the end of July, Bank Rossii said on Sept. 20, joining Thailand, South Korea and Mexico in adding the metal to their coffers this year. Cash silver rose 0.8 percent to $36.1550 an ounce, after tumbling 9.6 percent yesterday, the most since May 5, when the metal fell after the CME Group Inc. raised margins five times in two weeks. Spot platinum gained 0.4 percent to $1,694.35 an ounce, while palladium fell 0.8 percent to $645.25 an ounce. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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