* Gold futures rise 2.8 percent
* Global central bank rate cuts fail to calm markets
* Investor rush to safer assets boosts gold's appeal
(Recasts, updates prices, market activity to U.S. close)
By Alden Bentley and Humeyra Pamuk
NEW YORK/LONDON, Oct 8 (Reuters) - Gold rose to a nine-day
high on Wednesday, extending a safe-haven rally after
coordinated interest rate cuts by major central banks failed to
restore confidence to battered financial markets.
U.S. gold futures rose 2.8 percent, and silver jumped 3.4
percent as investors continued to flee the stock market and
park their money in hard assets.
"Gold truly is the commodity, and silver by its parasitic
role, they are truly the flight-to-safety vehicles. With the
dollar losing some ground, that lent a little bit of support as
well," said Bill O'Neill, a partner at LOGIC Advisors.
The Dow Jones industrial stock average ended down 189
points. It had spent some of the day in positive territory
after a series of scary slides reflecting pessimism about
whether global credit system bailouts will prevent economic
disaster.
Central banks around the world cut interest rates in unison
in a joint response to the world's worst financial crisis in
nearly 80 years. [ID:nHKG77476
December gold <GCZ8> reached $924.90, its highest since
Sept. 29. It settled $24.50 higher at $906.50 an ounce on the
COMEX division of the New York Mercantile Exchange.
Spot gold <XAU=> rallied to $920 an ounce, its highest
since Sept. 29 and was last quoted at $913.80 an ounce, up 3.1
percent from $886.60 at Tuesday's New York close.
"Gold will still continue to gain safe-haven interest,"
said Simon Weeks, director of precious metals at Bank of Nova
Scotia.
"I do not think the cuts will solve the situation. It will
help smooth the situation, but I don't think there are any
miracle cures at the moment," he said.
The metal touched multiyear highs in several other
currencies. In South African rand, it touched its highest price
recorded on Reuters data, which goes back to 1990. In
Australian dollars, it was at the highest since 1985.
Spot gold has risen 25 percent since mid-September as a
deepening financial crisis, spreading to banks in Europe from
the United States, prompted investors to sell investments in
equities markets and seek refuge in safer assets.
But it remained well below its lifetime high of $1,030.80
an ounce struck in March of this year.
Physical demand for gold also has shot up, analysts say, as
consumers invested in gold coins amid news of banks being taken
over by governments or sold to rivals.
The U.S. Mint said on Tuesday that because of the extreme
fluctuating market conditions for 2008, as well as current
market conditions, gold and silver demand is "unprecedented."
Holdings in the world's largest gold-backed ETF, the SPDR
Gold Trust, rose to 745.22 tonnes as of Oct. 8 from 744.54 per
tonne as of Oct. 7.
December silver <SIZ8> jumped 43.0 cents to $11.81 an
ounce. Spot silver <XAG=> went out at $11.74 an ounce, versus
the close at $11.51 an ounce on Tuesday.
Spot palladium closed unchanged.
Platinum fell, ending the day near $990.50 an ounce, down
from $1,004.00 amid heavy selling on fears of falling demand
for autocatalysts. It tumbled to $920 an ounce on Monday, its
lowest level since November 2005, on the back of poor car
sales, especially in the United States.
(Editing by Peter Blackburn; Editing by David Gregorio)
