Gold Touches New 7-Month High on Safe-Haven Buying

Though U.S. dollar rallied against Euro, gold futures on the COMEX Division of the New York Mercantile Exchange soared sharply on Tuesday and hit a new high since last July on safe-haven buying. Silver and platinum also ended much higher.

Gold price for April delivery went up 25.30 U.S. dollars, or 2.7 percent, to settle at 967.50 dollars an ounce. It touched 975.40dollars during the session, the highest level in 7 months.

March silver closed at 14.01 dollars per ounce, up 38.5 cents. April platinum rose 37.30 dollars to 1,098.30 dollars per ounce.

The worsening world economy and poor performance in stock market forced investors to flock to precious metals market for safe-haven, analysts said.

President Barack Obama signed a 787-billion-dollar stimulus bill on Tuesday afternoon, but it failed to help the equity market climb up. On the contrary, the Dow Jones Index fell to the lowest level for 2009 and now faces the danger of falling through its 6-year low. The Dow lost about 260 points to 7,588 points by the ending time of gold.

Analysts indicated that as the economic stimulus plans and lower interest rates policies went on, inflation would be inevitable in the long run, which made precious metals more attractive as a risk hedge.

New York Federal Manufacturing Survey plunged to a record low of -34.65 in February, underscoring the dim prospects of the U.S. economy. Generally speaking, investors preferred to hold precious metals to store value during economic turmoil.

The demand for safe-haven made investors ignore the dollar's rally versus euro. Shortly after the gold closed, the ICE U.S. dollar Index climbed more than 1.2 percent.