LONDON, Jan 26: Gold climbed above $900 an ounce to its strongest level in more than three months in Europe on Monday, lifted by interest in bullion as a haven from risk.

Spot gold was $905.90/907.90 an ounce at 1046 GMT, up from $898.10 in New York late on Friday. Earlier in the session the precious metal hit $907.40, its highest since Oct 10.

Gold priced in sterling hit a record 661.55 pounds, while euro-priced gold remained near the all-time high it hit on Friday, as fears over the global economic slowdown and volatility in other asset prices spurred buying.

RBS Global Banking & Markets’ head of commodity strategy Nick Moore said factors including falling interest rates, the reinflation of Western economies and the prospect of lower supply both from mines and via central bank sales were supporting gold.

Investors were seeking the safety of physical bullion as other asset prices met fresh volatility, analysts said.

In times of economic crisis, falling equity markets and mounting aversion to risk, physical gold is preferred as the safest form of investment, Commerzbank analyst Eugen Weinberg said.

On the supply side, AIM-listed gold miner Peter Hambro Mining said its 2008 attributable gold production was up 36 per cent at 393,600 ounces, and that it expects its 2009 production to be 460,000-510,000 ounces.

Among other precious metals, silver rose in line with gold to $12.03/12.11 an ounce from $11.92.

Platinum firmed to $965/970 an ounce from $955.50 an ounce in New York late on Friday.We would not be surprised to see the gap between platinum and gold narrow: the ratio stands at about 1.07 at the time of writing and we have a standing recommendation to buy the platinum gold spread when the ratio falls below 1.05,” UBS strategist John Reade said in a daily note.

We believe that in the long term platinum should trade at a considerable premium to gold and we observe that periods of platinum’s discount to gold tend to be measured in days or weeks rather than months and years, he added.—Reuters