Gold soars on economy woes

LONDON - Gold soared to record highs above

$910 an ounce today as equities struggled for gains and the dollar fell.

Wall Street looked set for a moderately positive start with investors looking down the road to the start of fourth quarter earnings seasons for US companies later in the week.

Earnings from S&P 500 companies are expected by analysts to have fallen more than 8%, according to Reuters Estimates. But worries about the slowing global economy and the chances of recession in the US were the main focus with investors eyeing a likely interest rate cut from the US Federal Reserve before the month is out.

The Fed is widely expected to cut rates by 50 basis points to 3,75% on January 30, although some analysts have been suggesting an emergency meeting could come earlier.

Poor economic data and lingering worries about inflation, meanwhile, were driving investors into gold and other precious metals. Spot gold hit a record high of $914 an ounce.

Safe-haven buying also pushed platinum to a record high of $1,590 an ounce and silver rallied to its highest in 27 years at $16,58 an ounce.

On equity markets, the mood was mixed. MSCI’s main world stock index was up 0,4% but its emerging market gauge was flat. European equities were slightly higher after losing ground for six sessions in a row on persistent concerns over the prospect of a US recession.

The FTSEurofirst 300 index of top European shares was up 0,1%. But it has lost 5% so far this year, easily wiping out all of last year’s gains. Japan’s stock markets were closed for a holiday.