Gold jumps above $920
Sunday, 28 September 2008

AP, NEW YORK -- Gold prices briefly jumped above $920 an ounce Friday as a stalled plan to bail out the U.S. financial system unnerved investors and prompted a flight into safe-haven assets. Silver also rose.

In other commodities trading, crude oil turned slightly lower on worries that failure to approve the $700 billion rescue package would deepen the economic crisis and further curtail U.S. energy demand. Agriculture futures also fell.
 
Investors fixated on Washington as lawmakers huddled in meetings in hopes of sealing an agreement on the package that would win approval in both houses of Congress. The White House-backed measure would create a repository for billions of dollars of banks' bad mortgage-related debt and other risky assets. Republican lawmakers rejected the plan Thursday and proposed dramatic changes, though officials from both parties said Friday they were making progress.
 
Still, uncertainty about the deal fed market anxiety about the possibility of more economic turmoil, leading many investors to pull money out of stocks to buy precious metals and other safe-haven assets.
 
''There's still tension in the market and that's supporting gold,'' said Carlos Sanchez, analyst with CPM Group in New York. ''Everybody wants to know what's going to happen from here. Are corporate profits going to deteriorate? Is inflation going up? Will credit stay tight? Nobody knows.''
 
Gold for December delivery rose as high as $920.10 an ounce on the New York Mercantile Exchange before easing back to settle at $888.50, up $6.50.
 
Other precious metals traded mixed. December silver rose 22.8 cents to settle at $13.503 an ounce, while December copper fell 6 cents to settle at $3.0745 a pound.
 
In energy markets, worries about the bailout deal weighed on oil as investors fretted that more economic tremors would undermine Americans' ability to pay for gasoline, heating oil and other energy.
 
Light, sweet crude for November delivery fell $1.13 to settle at $106.89 on the Nymex, after earlier dipping as low as $104.25. Crude rose $2.29 to settle at $108.02 on Thursday.
 
In other Nymex trading, gasoline futures fell 3.22 cents to settle at $2.6651 a gallon, while heating oil futures fell 3.09 cents to settle at $3.0174 a gallon.
 
In agriculture markets, grain prices traded lower on the Chicago Board of Trade.
 
Corn for December delivery fell 15.25 cents to settle at $5.43 a bushel, while November soybeans lost 19 cents to settle at $11.64 a bushel. December wheat lost 20.25 cents to settle at $7.16 a bushel.

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