Gold Rises as Slump in Global Equities Boosts Demand for Haven

By Pham-Duy Nguyen

Oct. 10 (Bloomberg) -- Gold rose, heading for the biggest weekly gain in almost a month, after equities fell worldwide, boosting the appeal of the precious metal as a haven asset.

Stocks in Asia and Europe tumbled, and U.S. stock futures fell, driving the MSCI World Index down 19 percent this week, the worst drop on record. The Reuters/Jefferies CRB Index of 19 raw materials slid for a second day and is down 7.1 percent since Oct. 3, while gold has gained 9.9 percent.

``Gold is now rising while most everything else is still being liquidated as the deleveraging digs deeper,'' said James Turk, the founder of Goldmoney.com, which held $405 million of gold and silver in storage for investors at the end of September. ``People who have managed to get liquid in recent weeks are now focusing on safety, and they are buying gold.''

Gold futures for December delivery jumped $29.30, or 3.3 percent, to $915.80 an ounce at 9:01 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest weekly gain since Sept. 19, when most-active futures rose 13 percent. The metal reached a record $1,033.90 on March 17.

Silver futures for December delivery fell 27.5 cents, or 2.3 percent, to $11.60 an ounce. Before today, the price dropped 20 percent this year.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.