Gold hits a new high as Wall Street swings wildly

NEW YORK (AP) ? Investors flocked to gold Friday, sending it to the latest of a series of record highs, as fears about recession in the world’s major economies infected financial markets.

The metal soared as high as $1,881.40 an ounce. It’s been on a tear this summer, rising more than 15 percent in August alone. In the same three weeks, the Standard & Poor’s 500-stock index has fallen about 12 percent.

The last time gold was worth less than $1,000 an ounce was October 2009. It has gained steadily since then, a beneficiary of investors’ concern about the uncertain state of the global economy, diving stock markets and moves by central banks around the world to weaken their currencies.

The record highs remain below gold’s 1980 peak when adjusted for inflation, however. That peak of $850 an ounce equals about $2,400 in today’s dollars.

Several major banks and economists have recently sounded warnings on the risk of a new recession.

Morgan Stanley on Thursday cut its global economic growth forecast for this year and next, saying the U.S. and the 17 countries that use the euro were “hovering dangerously close to a recession.”

JPMorgan Chase and Citigroup followed suit on Friday.

JPMorgan Chase cut its forecast steeply for growth in the U.S., the world’s biggest economy, to a measly 1 percent in the last three months of the year from an already weak 2.5 percent.

“The risks of a recession are clearly elevated,” said JPMorgan economist Michael Feroli.

Citi thinks weak growth will last a long time. It expects the U.S. economy to grow a tepid 2.1 percent next year, not nearly enough to add the jobs needed to reduce unemployment.

More than fear is driving gold higher. The simple fact that it has kept rising in an otherwise turbulent market is part of the metal’s appeal.

Gold crossed $1,600 an ounce for the first time in mid-July; three weeks later it was worth more than $1,700 an ounce. Ten days later, it passed $1,800 an ounce, and it’s now careening close to $1,900.

In midday trading Friday, gold for December delivery, the most actively traded contract, was up $31, or 1.7 percent, trading at $1,853 an ounce.

What would $2,000 an ounce gold mean for shoppers? Gold is used in industrial products and mainstream consumer goods. With every fresh high, consumers will have to pay more for everything from engagement rings to crowns for their teeth.

Big U.S. jewelry chains already raised prices this summer, citing the rising costs of gold and diamonds.