Gold Rallies for Third Day as Investors Seek Haven From Turmoil

Gold has jumped 16 percent in the past week as the dollar lost 4.8 percent against the euro amid the widening global credit crisis and on concern a U.S. proposal to buy $700 billion of troubled assets would widen the budget deficit.

''Recent events in the financial markets have raised the level of uncertainty, making gold more appealing as a safe haven asset,'' Merrill Lynch analysts led by Francisco Blanch, wrote in a report e-mailed today. ''Once the immediate liquidity crisis subsides, the market should focus on the fiscal implications of the recent measures, putting heavy downward pressure on the U.S. dollar.''

Bullion for immediate delivery gained 1.2 percent to $907.52 an ounce at 9:07 a.m. in Singapore. Silver for immediate delivery added 1.3 percent to $13.62 an ounce.

The dollar traded near a one-month low against the euro on concern the U.S. bail-out plan would undermine investor confidence in the world's largest economy. It traded at $1.4815 per euro from $1.4774 late in New York yesterday.

''Despite its increased appeal, gold has been unable to significantly decouple itself from movements in the U.S. dollar so far,'' the Merrill analysts wrote in the report. ''A weaker U.S. dollar should help support gold prices as the two markets have been closely linked in the past year.''

The precious metal for December delivery gained 0.7 percent to $915.00 an ounce in after-hours electronic trading on the Comex division of the New York Mercantile Exchange.

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