The price of gold hit its latest record high, near $1,830 an ounce, as investors spooked by the prospect of a return to recession sought out safety in the precious metal.
Gold prices have more than doubled since the recession began in late 2007. They've risen about 19 percent since the beginning of June, as European leaders struggled to keep the debt crisis from infecting the region's major economies and U.S. politicians nearly drove the country to the brink of default, prompting Standard & Poor's to cut the country's AAA credit rating.
Morgan Stanley on Thursday cut its forecast for global economic growth for this year and 2012, saying the U.S. and the 17 countries that use the euro were "hovering dangerously close to a recession."
While gold has hit a series of record highs over the past 2 1/2 months, the Standard & Poor's 500 has dropped about 15 percent, while the dollar, a traditional safe haven during periods of market turbulence and fear, is flat against a group of six major currencies.
The metal's value, unlike that of a currency, doesn't depend on the health of a single country's economy. Its swift rise has made it popular with investors seeking big returns, as well as presumed safety from turbulent financial markets.
On Thursday, for example, the S&P 500 fell more than 4 percent at midday, following a selloff in European and Asian markets. A new slate of reports that pointed to a sharp slowdown in the economy spooked investors.
There was a steep drop in U.S. home sales last month, more people filed jobless claims last week and an August regional manufacturing report was weak. There was downbeat data from overseas.
At midday, gold for December delivery, the most-traded futures contract, was worth $1,820.50 an ounce, up $26.70, or 1.5 percent. Earlier Thursday it hit $1,829.70 per ounce, a record high.
Still, when adjusted for inflation, gold remains below its 1980 peak of $850 an ounce. That's about $2,400 in 2011 dollars.
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