* Stock tumble, financial crisis trigger safe haven buying
* Gold higher despite dollar rally, losses in oil, commods
* Bullion at six-month high in euro terms
(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Oct 6 (Reuters) - Gold prices rose 4
percent on Monday as investors sought a safe haven from steep
losses in world stock markets amid mounting fears a worsening
financial crisis would lead to a global recession.
Gold jumped in spite of a rallying dollar, heavy drop in
crude oil and widespread losses in all other commodities.
Losses on the equity markets spurred buying of alternative
assets, such as bullion. The blue-chip heavy Dow Jones
industrial average <> fell more than 700 points at one
point, breaking below 10,000 for the first time since October
2004, while European stocks also plummeted.
"There is a flight to gold as a safe haven again today,
which is supporting prices," said Dresdner Kleinwort consultant
Peter Fertig.
Spot gold <XAU=> traded at $867.30/869.30 an ounce at 2:37
p.m. EDT (1837 GMT), up 3.9 percent from $834.80 an ounce, its
Friday nominal close.
U.S. gold futures for December delivery <GCZ8> settled up
$33.00, or 4.0 percent, to $866.20 an ounce on the COMEX
division of the New York Mercantile Exchange.
"(Given) the safe haven element, more concern regarding the
credit crisis, and seeing the equity market tumble, it is
certainly not surprising to see new buying in the gold market
today," said David Meger, metals analyst at Alaron Trading in
Chicago.
In euro terms, the metal reached 645.33 euros an ounce, its
strongest since late March, when it hit a record high of
651.54.
The precious metal also benefited from strong demand from
smaller investors for investment coins and bars.
"We feel extremely positive on gold prices as investors
rush to buy gold coins as protection against further market
volatility," said Fairfax analyst John Meyer.
"Gold seems so much more tangible an investment than many
other instruments and is not vulnerable to rising supply," he
added. "(And) gold looks good in an inflationary environment."
Gold largely shrugged off dollar strength and weaker oil.
The U.S. currency hit a 13-month high against the euro as fears
over bank troubles in Europe mounted and investors shunned
riskier assets. []
U.S. crude oil futures <CLc1> ended $6.07 lower at $87.71
per barrel on expectations the growing financial crisis will
further slow already faltering global fuel demand. []
Gold usually moves in tandem with crude, as it is often
bought as a hedge against oil-led inflation.
FIRM DEMAND
Prices are being supported by interest in bullion-backed
exchange traded funds. The two main gold and silver ETFs remain
near record levels, despite recent outflows.
Holdings of the SPDR Gold Trust <GLD>, the world's largest
gold-backed ETF, eased 2 percent from last week's record highs
on Friday, according to the fund. []
The amount of metal held to back the largest silver ETF has
also slipped from record levels. The iShares Silver Trust
<SLV.A> said its holdings eased 3/4 of a percent, or just over
50 tonnes week-on-week, to 6,849.50 tonnes on Friday.
Silver ETFs have proved popular in recent months as lower
silver prices attract more retail investors to the market.
Spot silver <XAG=> was quoted at $11.03/11.13 an ounce,
down from its Friday nominal close of $11.09 an ounce.
Among other precious metals, platinum <XPT=> tracked gold
higher, rallying as much as 3 percent before closing at
$964.50/984.50 an ounce, compared with its Friday nominal close
of $950. Palladium <XPD=> eased to $193/203 an ounce from its
Friday finish of $194.
(Editing by Christian Wiessner)
