Gold extended a rally to an all-time high, topping $1,800 an ounce, on increased demand for a haven investment as global equities plunged amid escalating European and U.S. debt woes. Immediate-delivery metal rallied as much as 1.2 percent to $1,814.95 an ounce, and traded at $1,802.60 at 8:55 a.m. in Singapore. The December-delivery contract climbed as much as 1.9 percent to $1,817.60 on the Comex in New York, rising for a fourth straight day. The Dow Jones Industrial Average sank 4.6 percent to 10,719.94 yesterday, the lowest level since September 2010, and the euro dropped for a second day against the dollar. Asian stocks extended the global rout today, with the MSCI Asia Pacific Index falling 1.6 percent. This week, spot gold has jumped as much as 9.1 percent. “The race to debase currencies is on,” James Dailey, who manages $185 million at TEAM Financial Management LLC, said in a telephone interview from Harrisburg, Pennsylvania yesterday. “Gold will continue to appreciate until there is a fundamental shift in government policies.” CME Group Inc. (CME) increased the initial margin on gold futures to $7,425 per contract from $6,075 with effect from the close of business today, according to a website statement. The maintenance margin will rise to $5,500 from $4,500, it said. Gold has surged after Standard & Poor’s cut the U.S. credit rating by one level from the top AAA grade on Aug. 5. That S&P announcement, combined with Europe’s sovereign-debt crisis, spurred a rout in global equities and stoked concern that the U.S. may lapse into another recession. ‘Ultimate Collateral’ “Physical gold is the ultimate collateral because it has no credit risk,” Bank of America Merrill Lynch, said in a report dated Aug. 9. The bank raised its 12-month forecast to $2,000 an ounce on the increased chance for another round of U.S. asset purchases, known as quantitative easing. Shares of producers rallied. Stock in Newcrest Mining Ltd., Australia’s biggest gold producer, surged as much 4.4 percent to A$40.99 today, while Barrick Gold Corp., the world’s largest gold miner, climbed as much as 6.3 percent to C$49.77 yesterday. “The overall problems in the U.S. are far from over, and the appetite for haven assets like gold is very strong,” said Viral Shah, vice president at Geojit Comtrade Ltd. in Mumbai. Investors “want to opt out from the other asset classes, and that is always going to be to the benefit of gold,” he said. Spot silver gained as much as 1.4 percent to $39.845 an ounce, platinum rose as much as 0.4 percent to $1,777 an ounce and palladium was little changed at $727.75 an ounce. To contact the reporters for this story: Debarati Roy in New York at droy5@bloomberg.net; Madelene Pearson in Mumbai at mpearson1@bloomberg.net. To contact the editors responsible for this story: Steve Stroth at sstroth@bloomberg.net; James Poole at jpoole4@bloomberg.net

Source