By Nicholas Larkin

Feb. 20 (Bloomberg) -- Gold rose to more than $1,000 an ounce in New York for the first time in almost a year as investors, spooked by plunging stocks and a deepening recession, sought to protect their wealth.

Gold futures for April delivery rose as much as $23.80, or 2.4 percent, to $1,000.30 an ounce and traded at $995.10 at 9:40 a.m. on the New York Mercantile Exchange’s Comex division. Gold, the only metal to advance in 2008, has rallied every year since 2000 and was up 10 percent in 2009 before today.

Global stocks have extended their slide, erasing 42 percent of their value since the end of August on concern that the economic slump may worsen and wipe out corporate earnings. Governments are lowering interest rates and spending trillions of dollars to combat the recession, also spurring investors to buy bullion as a hedge against potential inflation. Physical demand has pushed gold holdings in exchange-traded funds to records.

“One camp of investors is buying gold because of fear the fiscal stimulus packages are insufficient to bring the economy out of recession,” said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. “The other camp fears the stimulus packages will lead to inflation.”

Gold last topped $1,000 on March 18 in New York, partly as a hedge against weakness in the dollar. The last time the metal traded this high, the price reached a record $1,033.90 on March 17 before retreating to as low as $681 in October. This time, analysts expect the rally will continue as investors lose confidence in financial assets.

“People will soon realize the dollar is just as bad as other currencies,” said Mario Innecco, a futures broker at MF Global Ltd. in London. “Last year the other currencies were still quite strong. This year we’ve had a year of more troubles, and troubles are still piling up.”

Government Spending

Gold is cementing its status as a haven investment as governments seek to flood the financial system with cash in an effort to haul the global economy out of a recession.

German lawmakers backed a 50 billion-euro ($63 billion) economic package on Feb. 13, the country’s second stimulus measure in three months. The same day, Australia’s parliament cleared a A$42 billion ($27 billion) plan.

U.S. President Barack Obama signed into law a $787 billion package of spending and tax cuts on Feb. 17, and Treasury Secretary Timothy Geithner has pledged as much as $2 trillion in financing for programs aimed at spurring new lending.

The Treasury probably will borrow a record $2.5 trillion in the fiscal year that ends Sept. 30, according to Goldman Sachs Group Inc.

Investment Flow

Gold above $1,000 may attract more investors seeking to take advantage of the longest advance in the metal’s price in 60 years. Assets in some of the industry’s largest exchange-traded funds are at all-time highs.

Holdings in ETF Securities Ltd.’s gold exchange-traded commodities rose to a record 7 million ounces as of Feb. 13. The SPDR Gold Trust, the biggest ETF backed by the metal, expanded to 1,029 metric tons yesterday, closing in on the reserve holdings of Switzerland, with 1,040 tons, as the world’s sixth-largest owner of gold. Zuercher Kantonalbank’s fund has record assets of 3.734 million ounces.

Investment demand for bullion, including coins and bars, almost tripled to 399 tons in the fourth quarter, as total demand climbed 26 percent to 1,036.5 tons in the period, the London- based World Gold Council said on Feb. 18. Retail and professional investors will continue to seek gold’s stability, said Aram Shishmanian, the council’s chief executive officer.

The value of gold held by investors at the Perth Mint in Western Australia has doubled to “comfortably over $2 billion” in the past year, with 80 percent from overseas, Nigel Moffatt, treasurer and manager of the mint, said on Feb. 13.

Eagle Flies

Sales of 1-ounce American Eagle gold coins more than quadrupled in January to 92,000 ounces from a year earlier, the U.S. Mint said this month.

Among other metals, silver gained 46.5 cents, or 3.3 percent, to $14.40 an ounce in New York. The metal climbed 23 percent this year before today, the best-performing commodity this year in the UBS Bloomberg CMCI Index of 26 raw materials.

Platinum jumped $13, or 1.2 percent, to $1,089.50 an ounce, and palladium fell 10 cents to $216.50 an ounce in New York.

Gold’s all-time inflation adjusted record is $2,224 on Jan. 21, 1980, according to a calculator on the Web site of the Federal Reserve Bank of Minneapolis.

“It doesn’t matter right now whether it’s deflation or inflation,” Dennis Gartman, an economist and the editor of the Gartman Letter in Suffolk, Virginia, said in a Bloomberg Television interview. “Gold wants to go up. Don’t fight that trend.”

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net