Gold rises as lower equities spur demand

London: Gold rose for a second day in London as falling equity markets boosted demand for the precious metal as an alternative investment.

Stocks in Europe and Asia fell for the first time in three days and US futures slid as Japan confirmed its economy shrank at the fastest pace since 1974. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, advanced 0.9 per cent to a record 1,038.17 metric tonnes yesterday.

Gold "should benefit further in the coming sessions by renewed investment demand as the economic and financial sector outlook deteriorates further," James Moore, an analyst at TheBullionDesk.com in London, wrote yesterday in a note.

"While rallies towards $950 (Dh3,489) are likely to run into further pockets of long liquidation, we expect dips to remain well supported."

Gold for immediate delivery rose as much as $8.22, or 0.9 per cent, to $917.62 an ounce and traded at $917.08 by 11.30am in London.

April futures added $6, or 0.7 per cent, to $916.70 an ounce in electronic trading on the New York Mercantile Exchange's Comex division.

The metal rose to $914.50 in yesterday's morning "fixing" in London.