The price of gold jumped 2 percent to a 7-1/2-month high on Monday, briefly nudging above the psychological level of $1,200 an ounce, as sliding stock markets and worries over global economic growth prompted investors to seek safety. Stock indexes world-wide tumbled on persisting fears of a global economic slowdown, while benchmark 10-year Treasury yields hit their lowest in a year on demand for assets deemed less risky, such as bullion.
Spot gold reached a peak of $1,200.60 an ounce, its strongest since June 22, after breaking key resistance at its October high at $1,190.63. At 3:02 pm EST (2002 GMT) it was up 1.8 percent at $1,194 an ounce. "The drive for gold today is purely tied to the risk type of trade," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago, pegging the next target level at $1,210.
"People have to move their equities out of there, have to put (money) into safer assets." US gold for April delivery settled up 3.5 percent at $1,197.90 an ounce. Other precious metals tracked gold higher. Platinum was up 2.2 percent at $926.98, after reaching $931.76, its highest since November 9. Silver jumped 2.8 percent to $15.39 an ounce, after briefly touching $15.46, its highest since November 3. Palladium was up 2.9 percent at $515.20 an ounce.
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