By Pham-Duy Nguyen and Nicholas Larkin Sept. 7 (Bloomberg) -- Gold futures approached a record high as a slump in equities spurred demand for the precious metal as an alternative investment. Stocks in Asia, Europe and the U.S. fell on heightened concern that the global economy will struggle. The euro dropped as much as 1.1 percent against the dollar as an industry group said Germany’s 10 largest banks may need fresh capital to meet new regulations. Gold reached $1,261.60 an ounce. The all-time high on June 21 was $1,266.50. “Gold is back in vogue with the stock-market weakness,” said Adam Klopfenstein, a senior market strategist at Lind- Waldock in Chicago. “People want protection from a downdraft in stocks. You’re seeing a lot of the flight-to-quality bid come into gold.” Gold futures for December delivery rose $8.30, or 0.7 percent, to $1,259.40 at 10:07 a.m. on the Comex in New York. Earlier, the metal climbed to the highest level for a most- active contract since June 28. The exchange was closed yesterday for Labor Day. German lenders including Deustche Bank AG need to raise about 105 billion euros ($134 billion) to reach an estimated 10 percent Tier 1 capital ratio, a key measure of financial strength. Gold priced in U.K. pounds and euros rose to the highest level since July 1. “European-bank concerns are flying back into the picture,” Klopfenstein said. “The sell-euro-buy-gold trade is back on.” Silver futures for December delivery were little changed at $19.97 an ounce. Earlier, the price reached $20.045, the highest level since March 19, 2008. To contact the reporters on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net. Nicholas Larkin in London at nlarkin1@bloomberg.net;

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