Gold Spikes as Stock Market Sinks

 

Worries over a double-dip recession in the U.S. and fresh sovereign debt concerns in Europe weighed on risk appetites across the globe. The S&P 500, which declined 2.30 to 1196.40 Friday morning, plunged 4.8% yesterday – leaving the benchmark index lower by 11% in the past 11 trading sessions. Oil fell 5.8%, helping to erase all of the 2011 gains in the Reuters-Jefferies CRB Index. The CBOE Volatility Index (VIX), a widely-followed gauge of “fear” in the marketplace, spiked 35% to 31.66.

Speculation that Chairman Bernanke and the U.S. Federal Reserve will launch a third round of quantitative easing to restart the waning recovery helped keep gold buoyant amid the carnage. Gold gained $18.25 to $1,665.90 per ounce Friday morning after a 0.8% drop during Thursday’s volatile session.

Investors and traders awaited the U.S. employment report, scheduled to be released at 8:30m eastern time this morning.

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