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Message: Gold ends up $70 as investors flee financial turmoil
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Gold ends up $70 as investors flee financial turmoil
Its daily gain is the biggest in dollar terms since at least 1980
NEW YORK (MarketWatch) -- Gold futures closed up $70 an ounce Wednesday, the biggest daily gain in dollar terms in more than two decades, as news of the U.S. government's takeover of the largest U.S. insurance company fueled massive safe-haven buying.
Gold for December delivery jumped $70, or 9%, to end at $850.50 an ounce on the Comex division of the New York Mercantile Exchange. That represents gold's biggest one-day jump in dollar terms since at least 1980, the earliest year historical data were available on the Comex. Gold futures started trading in the U.S. in 1974.
After the market closed, gold continued to rise more than $20 to $870.90 an ounce in electronic trading.
"Gold is acting like it is supposed to on a flight-to-safety move," said Amaury Conti, an equity trader at investment adviser Austin Calvert-Flavin. "We have a global financial crisis and nobody has a clear answer. Therefore stocks, currencies and debt are being questioned and nobody wants to own a 'paper' asset," he said.
Jon Nadler, senior analyst at Kitco Bullion Dealers, also pointed to concerns about Swiss bank UBS
Meanwhile, the financial turmoil accelerated in Russia as trading on the country's major exchanges was halted for a second day and the finance ministry announced plans to loan the country's three largest banks up to $44 billion. See full story.
The recent turmoil could encourage traders to put their money back into commodities, analysts said. It can "buy the commodities sector some time," Nadler said.
"A stoppage of forced sales and a hoped-for return of some of the speculative spirit in various assets and the easing up in the hoarding of cash is what markets are effectively expecting out of the Fed's move," he said.
Dollar falls
Deepening financial upheavals also hit the dollar, which fell against the euro and the British pound.
A weakening dollar tends to raise dollar-denominated gold prices.
Also moving gold prices was crude oil. After slumping 10% in the past two sessions, crude gained $2.35, or 2.6%, to $93.50 a barrel. Read Futures Movers.
Other metals also moved higher. December silver surged 11% to $11.68 an ounce, October platinum added 1.7% to $1,086.30 an ounce, and December palladium rose 0.5% to $227.10 an ounce. However, copper for December delivery fell slightly to $3.04 a pound.
In spot trading, the London gold fixing price
Gold - Afternoon Fix (Source N M Rothschild)
used as a benchmark for gold for immediate delivery, stood at $813 an ounce Wednesday, up $33.5 from Tuesday afternoon. 
Moming Zhou is a MarketWatch reporter, based in San Francisco.
Nick Godt is a MarketWatch reporter based in New York.
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