Gold soared to an all-time high Monday as investors sold off other commodities from oil to grains, fleeing from riskier assets after the US loss of its prized AAA credit rating stoked fears about economic growth. Gold has held up as a bastion of safety this year, gaining more than 20 percent. Gold prices shot past $1,700 an ounce for the first time Monday, the first day of trading after Standard & Poor's on Friday cut the long-term credit rating of the US. Gold for December delivery gained $61.40 to close at $1,713.20 an ounce. Silver for September delivery rose $1.169 to settle at $39.38 an ounce. “You're going to see additional allocation to gold as the fiscal problems in developed countries that led to (recent market declines) are not going away anytime soon,” said Ross Koestrich, iShares Global Chief Investment Strategist at BlackRock. “It is one of the few safe-haven assets left.” "Everyone was talking about Armageddon at the weekend and this morning, it's held the rot but doesn't remove the themes that have been driving the stock markets," said Saxo Bank senior manager Ole Hansen. Dominic Schnider, executive director for wealth management research at UBS, said gold may even be headed to $2,000 per ounce. Spot gold was up $42.70, or 2.6 percent, at $1,706.10 an ounce, after racing to a record $1,715.29 an ounce in early trade. Spot silver was up $1.45, or 3.8 percent, at $39.77 an ounce. Like gold, silver tends to benefit as a perceived hedge against economic insecurity. Spot platinum was up $12, or 0.7 percent, at $1,728 an ounce, while spot palladium was down $4, or 0.5 percent, at $738 an ounce. Investment bank Goldman Sachs increased its three-month forecast for spot gold by 5.1 percent to $1,645 an ounce, from $1,565 an ounce, its six-month forecast by 5.8 percent to $1,730 an ounce, from $1,635 an ounce, and its 12-month forecast by 7.5 percent to $1,860 an ounce, from $1,730 an ounce previously. Oil prices fell more than five percent Monday as the unprecedented downgrade of the United States's credit rating shook financial markets and sparked fears of slowing global energy demand. New York's main contract, West Texas Intermediate (WTI) light, sweet crude for delivery in September, fell $5.57 to close at $81.31 a barrel, its lowest level since November. In London, Brent North Sea crude for September tumbled $5.63 to settle at $103.74 a barrel on the IntercontinentalExchange. US stocks plunged Monday. The Dow dropped 633 points to close at 10,811. The Standard & Poor's 500 index was down even more sharply, 68.49 points, or 5.7 percent, to 1130.89. The Nasdaq was down 114 points, or 4.5 percent, to 2,417. Britain's FTSE 100 index of leading British shares closed down 3.4 percent at 5,068.95, while France's CAC-40 slid 4.7 percent to 3,125.19. Germany's DAX tumbled a further 5 percent at 5,923.27.
