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Gold Futures Soar to Record as Economy Sags – Bloomberg

08/18/2011

Gold futures surged to a record $1,829.70 an ounce on demand for an investment haven as mounting concern that the global economy is faltering triggered a plunge in equities.

The Standard & Poor’s 500 Index tumbled as much as 5 percent after manufacturing in the Philadelphia region unexpectedly contracted in August by the most in two years as orders plunged and factories shed workers. Europe’s debt crisis may freeze interbank markets and cut off funding, said Lars Frisell, the chief economist at Sweden’s financial regulator.

“There is further decay in the European situation,” Sterling Smith, an analyst at Country Hedging Inc., said in a telephone interview from St. Paul, Minnesota. “The nervousness in the equity markets is pushing people toward gold.”

Gold futures for December delivery jumped $31.50, or 1.8 percent, to $1,825.30 at 11:25 a.m. on the Comex in New York. Before today, the price climbed 26 percent in 2011, after posting gains in the previous 10 years.

Read More at Bloomberg.

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