Gold rose to a record above $1,880 an ounce in New York, rallying for the seventh straight week, as concern that the global economy is slowing drove equities lower.
The metal had its longest run of weekly gains since April 2007 as worse-than-expected US economic data and Europe’s debt crisis boost speculation that growth will falter. The MSCI All- Country World Index of equities fell as much as 1.7 per cent, heading for the fourth straight weekly drop, after Morgan Stanley cut forecasts for global growth.
"Lack of confidence in the global economy is pushing people towards gold," Tom Pawlicki, a Chicago-based analyst at MF Global Holdings Ltd., said in a telephone interview. "Gold will continue to advance unless leaders are able to resolve the European or US debt crisis."
Gold for December delivery gained $30.20, or 1.7 per cent, to settle at $1,852.20 on the Comex at 1:42 p.m. in New York, after touching $1,881.40, the highest ever. Prices have gained 6.3 per cent this week, the most since February 2009, and 14 per cent this month.
In London, the metal is in the 11th year of a bull market for spot prices, the longest winning streak since at least 1920.
FINANCIAL PROBLEMS
"Gold is the currency of the world at the moment, with the world convinced that the monetary and fiscal authorities are likely to do nothing right and everything wrong when it comes to resolving the world's current fiscal problems," Dennis Gartman, the economist who correctly forecast 2008's commodities slump, said in his daily Gartman Letter on Saturday.
Investors want to protect their wealth from declining equities, depreciating currencies and accelerating consumer prices. Gold may climb next week amid concern about debt crises and slowing growth, a Bloomberg News survey showed.
More From This Section
Sweden's financial regulator said lenders must do more to prepare for a worsening debt crisis in the region as the Wall Street Journal reported American regulators are intensifying scrutiny of the US arms of Europe's largest banks.
"Medium term, the disorder of the global monetary system and long-term inflation threat will amplify gold's nature as a currency and an inflation hedge," said Cai Hongyu, an analyst at China International Capital Corp., the country's biggest investment bank.
Silver futures for December delivery advanced $1.751, or 4.3 per cent, to $42.467 an ounce on the Comex. Earlier, prices surged to $42.67, highest since May 3.
On the New York Mercantile Exchange, palladium futures for September delivery fell $8.20, or 1.1 per cent, to $748.80 an ounce. The price gained 0.1 per cent this week.
Platinum futures for October delivery advanced $27.20, or 1.5 per cent, to $1,874.90 an ounce. That marked the 10th straight gain, the longest rally since October 2007.