Friday, February 20, 2009

gold hits $1000

NEW YORK/LONDON (Reuters) - Gold rose above $1,000 an ounce on Friday for the first time since March last year as nervous investors piled into the yellow metal to preserve wealth amid a tumbling stock market.

Long-term inflation worries fanned by the massive U.S. economic stimulus package signed by President Barack Obama this week has driven investors into gold, which is perceived as the most likely asset to hold its value against economic head winds.

"I think there's a little bit of panic out there. Equities are setting new lows and gold is the place to run to. I don't think there's much more than that," said Robert MacIntosh, chief economist at Eaton Vance in Boston.

Bullion continued to appreciate against other asset classes and commodities on Friday amid renewed fears that the U.S. government could be forced to nationalize banks amid a worsening financial crisis.

A ratio of gold against the S&P 500 index rose to its highest level since September 1990, and gold/oil ratio was at its loftiest since December 1998, according to Reuters data.

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