Gold climbed to the highest level in seven months on demand from investors to protect the value of their assets as stocks slump and the global recession deepens.
Gold has jumped 40 percent in almost four months as investor confidence in financial assets erodes and central banks spend trillions of dollars to prop up banks. The U.S. Treasury will likely borrow a record $2.5 trillion this fiscal year ending Sept. 30, according to Goldman Sachs Group Inc. Asian stocks slumped the most in three weeks today.
“There’s a lot of money flowing into gold as the stock market continues to decline,” said Ellison Chu, manager of precious metals at Standard Bank Asia Ltd., from Hong Kong.
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Gold for immediate delivery advanced 1.8 percent to $959.05 an ounce, the highest level since July 22, and traded at $958.74 at 2:05 p.m. Singapore time.
Investors are increasing holdings of gold in exchange- traded funds, depository accounts and coins and bars. The value of gold held by investors at the Perth Mint in Western Australia has doubled to “comfortably over $2 billion” in the past year, with 80 percent from overseas, Nigel Moffatt, treasurer and manager of the mint, said last week.