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Gold hits new record of $1,800 an ounce

Gold futures surged to another record Wednesday, topping $1,800 an ounce, on mounting demand for a haven as global equities plunged amid escalating U.S. and European debt woes.

This week, gold has jumped 8 percent, the biggest three-day rally since November 2008.

"The race to debase currencies is on," James Dailey, who manages $185 million at TEAM Financial Management LLC, said in a telephone interview from Harrisburg, Pa. "Gold will continue to appreciate until there is a fundamental shift in government policies."

Gold futures for December delivery climbed $41.30, or 2.4 percent, to settle at $1,784.30 at 2:13 p.m. on the Comex in New York. Earlier, the price reached a record $1,801, climbing to an all-time high for the third straight day.

This week, the metal has gained $132.50 after Standard & Poor's cut the U.S. credit rating last Friday.

Bank of America Merrill Lynch on Tuesday raised its 12-month gold-price forecast to $2,000 on the increased chance for another round of U.S. asset purchases, known as quantitative easing.

"The overall problems in the U.S. are far from over, and the appetite for haven assets like gold is very strong," said Viral Shah, a vice president at Geojit Comtrade Ltd. in Mumbai. Investors "want to opt out from the other asset classes, and that is always going to be to the benefit of gold," he said.

Silver futures for September delivery rose $1.444, or 3.8 percent, to $39.327 an ounce on the Comex.

Platinum futures for October delivery advanced $15.30, or 0.9 percent, to $1,771.70 an ounce on the New York Mercantile Exchange. The metal, used mostly in catalytic converters in cars, closed below gold for the first time since December 2008.

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