* Gold rises more than 1 pct after biggest gain ever on
Weds
* Funds flock to gold about financial woes hammer equities
* Platinum, silver tag along for the ride, up over 1 pct
(Update with comments, prices)
By Chikafumi Hodo
TOKYO, Sept 18 (Reuters) - Gold rose as much as 3 percent
to a more than six-week high on Thursday, extending its biggest
ever one-day rise as investors rushed to the safety of bullion
as credit fears continued to roil global financial markets.
The dollar steadied against major currencies after
Wednesday's fall against the euro, but demand for safe-haven
assets was clearly in evidence as investors fled stock markets
fearing the crisis on Wall Street had yet to play out despite
U.S. government efforts to prevent a financial meltdown.
Spot gold <XAU=> rose 1.1 percent, or $9.60, at $872.30 per
ounce as of 0223 GMT from the notional close in New York on
Wednesday, when it surged more than 10 percent or nearly $90,
exceeding the previous biggest one-day gain in 1980.
Gold earlier jumped more than 3 percent to as high as
$892.10 per ounce -- the highest since Aug. 5 -- with a burst
of strong buying from Japanese investors after the gold futures
contract on the Tokyo Commodity Exchange rose by its daily
limit, forcing them to buy cash gold and U.S. gold futures,
traders said.
"This is unbelievable. Nobody really expected this kind of
a rise. This tells how much the market is nervous," said Tatsuo
Kageyama, analyst at Kanetsu Asset Management in Tokyo.
"Basically funds are only heading into gold as
uncertainties in the financial market is very strong."
Gloom over the financial industry's outlook remained dense
on Thursday, with investors scanning the horizon for the next
possible victim even after U.S. authorities bailed out insurer
American International Group <AIG.N> with an $85 billion rescue
plan, Lehman Brothers collapsed and Merrill Lynch got bought.
U.S. stocks dropped more than 3 percent on persistent
worries about the health of the U.S. financial industry, and
Asian stock markets followed with 3-4 percent losses on
Thursday. []
COMEX gold futures extended gains after rising 9 percent on
Wednesday. The most active December contract <GCZ8> was trading
up $29.6 or 3.5 percent at $880.1 from the New York settlement.
Benchmark August 2009 Tokyo Commodity Exchange (TOCOM) gold
futures <0#JAU:> jumped by the daily 150 yen limit to 2,808 yen
per gram. It rose 5.6 percent from Wednesday.
"On charts, gold sentiment has clearly turned bullish and
$900 is in the market's sight, but the speed of the rise is too
fast," Kageyama said.
Precious metals consultancy GFMS said in a report that
investment demand was expected to drive gold prices "well
above" $900 an ounce in the fourth quarter as the dollar slips
and the outlook for the financial sector worsens.
[]
Gold was also helped by a surge in oil prices, which shot
up $6 on Wednesday, the largest one-day percentage gain in
three months, as a U.S. government report showed a fall in oil
stocks after hurricanes hit the Gulf Coast. []
Oil was little changed on Thursday at $97.20 a barrel.
Spot platinum <XPT=> slipped slightly to $1,139 per ounce
after rising by more than 3 percent to as high as $1,150.50
earlier on Thursday, bouncing from a two-year low after prices
nearly halved since July on weakening demand from car makers.
Precious metals prices at 0145 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 877.60 14.90 +1.73 5.39
Spot Silver 12.37 0.37 +3.08 -16.25
Spot Platinum 1139.00 21.00 +1.88 -25.07
Spot Palladium 243.00 0.00 +0.00 -33.97
TOCOM Gold 2808.00 150.00 +5.64 -8.24
1546
TOCOM Platinum 3783.00 101.00 +2.74 -29.14
11710
TOCOM Silver 402.10 40.00 +11.05 -25.67
64
TOCOM Palladium 834.00 41.00 +5.17 -38.27
546
Euro/Dollar 1.4361
Dollar/Yen 104.55
TOCOM prices in yen per gram, except for silver which is in
yen per 10 grams, spot prices in $ per ounce.
(Reporting by Chikafumi Hodo, Editing by Jonathan Leff)
