Gold to record high as equity rout stokes investor demand

Gold today advanced to records as the global rout in equities deepened on concern the economic slowdown will worsen after Standard and Poor's cut
the US credit rating.

Gold advanced by USD 33.10, or 1.9%, to USD 1,746.30 an ounce on the Comex, after earlier surging 4% to a record USD 1,782.50 an ounce. The metal for spot trading in London rose by USD 24, or 1.4%, to USD 1,743.52 an ounce after gaining 3.5% to an all-time high of USD 1,780.10, making the metal costlier than platinum for the first time since 2008.

The price yesterday jumped 3.4%, the biggest daily advance since January, 2009. While silver fell 3.5% to USD 38 an ounce, platinum gained 0.6% to USD 1,733.20 an ounce.

Bullion surged 23% this year, heading for an 11th year of gains, as the sovereign-debt crisis and a faltering economy boosted demand for the metal as a protection of wealth. S&P cut the long-term US rating one level to AA+ from AAA on August 5. The agency described the outlook as "negative" and criticised the nation's political system for failing to adequately address deficit reduction.