Gold near lifetime high as markets spook

Singapore: With global stocks tumbling on Tuesday on renewed fears about the health of the global economy gold added to its gains today and is just a few dollars away from a lifetime high of around $1,264 an ounce struck in June.

The metal is well on track to record its tenth annual gain. If so, it would then register its longest run of yearly increases in more than 40 years.

Gold was up at $1,256.95 on Wednesday, after rising as high as $1,259.80 on Tuesday. It recorded its all-time high on 28 June this year.

The immediate trigger for the slide in the markets, and gold gaining attraction as a safe haven destination on Tuesday, was a report in the Wall Street Journal that said "stress tests" published more than a month ago underestimated some lenders' holdings of potentially risky government debt.

Experts now foresee gold breaching the $1,260 level as any economic news that is less than favourable will spook investors towards gold.

US gold futures for December delivery hit a high of $1,261.60 on Tuesday.

Tuesday also saw silver, which normally tracks gold, rallying to its highest levels since March 2008.