Gold prices temporarily hit above $900 an ounce on Thursday as panicky investors assigned money into what is the safe haven of the moment
Gold prices temporarily hit above $900 an ounce on Thursday as panicky investors assigned money into what is the safe haven of the moment. However, the metal later gave back its gains on a report that the government may move more aggressively to steady the teetering financial system.
The 5.4% overnight rise in gold prices followed gold making its largest-ever one-day price advance on Wednesday and gains of more than $110 or 15% in a turbulent two-day rally. But late Thursday, after regular gold trading ended, investors began selling and shifting money back into stocks on a report that the U.S. government may create an entity to absorb banks' bad loans.
Gold for December delivery jumped as much as $75.50, or 8.8 percent, to $926 an ounce on the New York Mercantile Exchange before easing back to settle at $897, still up $46.50. In aftermarket trading, prices fell $36.30, to $860.70 an ounce.
“There's nowhere else to park your money, so they're parking their money in gold," Charles Nedoss, senior account manager and metals analyst with Peak Trading Group, said.
On Wednesday, gold rose as much as $90 before settling $70 higher, at $850.50 an ounce, the biggest one-day jump ever.
Gold had languished for months, but found new life this week as turmoil in the financial sector dramatically increased with the bankruptcy filing of Lehman Brothers Holdings Inc. and the government's bailout of American International Group Inc. The metal regained its appeal as a safe haven in rocky economic times.
Earlier in the day, gold also benefited as a falling US dollar, gains in crude oil and an unexpected rise in weekly jobless claims augmented buying.