The Hindu : Business : World gold extends biggest-ever gain

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Friday, Sep 19, 2008
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World gold extends biggest-ever gain

TOKYO: Gold rose as much as three per cent to a more than six-week high on Thursday, extending its biggest ever one-day rise as investors rushed to the safety of bullion as credit fears continued to roil global financial markets.

The dollar steadied against major currencies after Wednesday’s fall against the euro, but demand for safe-haven assets was clearly in evidence as investors fled stock markets fearing the crisis on Wall Street had yet to play out despite U.S. government efforts to prevent a financial meltdown.

Spot gold rose by 1.1 per cent, or $9.60, to $872.30 per ounce from the notional close in New York on Wednesday, when it surged by more than 10 per cent or nearly $90, exceeding the previous biggest one-day gain in 1980. Gold earlier jumped more than 3 percent to as high as $892.10 per ounce -- the highest since August 5.

Record rise in India

NEW DELHI: Gold sparkled as an alternative investment option with its prices posting a record single session rise of Rs. 1,265 per 10 grams in the Mumbai bullion market and gaining a handsome seven per cent in the futures market.

Traders said a steep fall in global stock markets following deepening of credit crisis in the U.S. shifted investors’ focus to gold as the yellow metal is considered the safest bet at times of crisis because handsome returns are assured.

Oil prices also bounced to $102 a barrel in London, increasing the appeal of metal, even as dollar, which has a direct impact on gold prices, weakened.

“Sliding equity markets and deepening global financial crisis have forced funds and other investors to shift their investments towards more safe assets, such as gold,” G Harish of Karvy Comtrade told PTI.

All the running four contracts — October, December, February and April — were trading higher with gains up to seven per cent on the Multi Commodity Exchange.

Both October and December contracts were also up by 2.29 per cent and 2.05 per cent at Rs. 13,038 and Rs. 13,110 per 10 gram, registering volume of 54,183 and 4,474 lots, respectively. — PTI

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