Nicholas Larkin and Pham-Duy Nguyen
Friday, February 20, 2009
Feb. 20 (Bloomberg) — Gold surpassed $1,000 an ounce in New York for the first time in almost a year as investors, hurt by plunging stocks and a deepening recession, sought to protect their wealth.
Gold futures for April delivery jumped as much as $23.80, or 2.4 percent, to $1,000.30 an ounce and traded at $996.60 at 12:03 p.m. on the New York Mercantile Exchange’s Comex division. Gold, the only metal to advance in 2008, has rallied every year since 2000 and was up 10 percent in 2009 before today.
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Global stocks have extended their slide, erasing 42 percent of their value since the end of August on concern that the economic slump may worsen and wipe out corporate earnings. Governments are lowering interest rates and spending trillions of dollars to combat the recession, spurring investors to also buy bullion as a hedge against potential inflation. Demand has pushed gold holdings in exchange-traded funds to records.
“One camp of investors is buying gold because of fear the fiscal stimulus packages are insufficient to bring the economy out of recession,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. “The other camp fears the stimulus packages will lead to inflation.”
This article was posted: Friday, February 20, 2009 at 10:33 am