Gold briefly tops $900 an ounce

Economic uncertainty, global demand and inflation fears push the metal higher...

  Economic uncertainty, global demand and inflation fears push the metal higher. $1,000 an ounce may not be far off.Friday was another disappointment for the bulls, marking the third straight weekly decline for the stock market. Stocks closed sharply lower on concerns that the credit crunch was affecting consumers.The price of gold crossed $900 an ounce for the first time Friday as the dollar weakened amid worries about slowing economic growth in the United States.And gold bulls believe $1,000 an ounce isn't far off. Gold closed at a new high of $897.70 an ounce after peaking at $900.10 at 10 a.m. ET. It's up 7% in January after rising 32% in 2007. The Dow Jones Industrial Average ($INDU), meanwhile, is down nearly 5% this month, its worst start for a year since 1991.The rise comes as investors speculate that the Federal Reserve will cut short-term interest rates at its Jan. 29-30 meeting. "It's a reflection of market sentiment: Gold is a hedge against uncertainty, and, right now, it's the best bet," Carlos Sanchez, a precious-metals analyst at CPM Group in New York, told The Associated Press. "None of the other investment options look that great, and gold does."Traders have been investing heavily in gold as they search for a safe haven amid concerns over the world's biggest economy. A weak dollar has made gold more affordable for buyers using stronger currencies. HSBC Securities and Morgan Stanley predicted the U.S. central bank will reduce its benchmark rate by half a percentage point this month to 3.75% after Fed Chairman Ben Bernanke suggested cuts may be necessary to guard against an economic slowdown. Gold rose 31% last year when the Fed slashed rates 1 percentage point to 4.25%, sending the dollar down 9.5%."Concerns of a recession will keep pushing up gold prices," Sanchez said. "Depending upon what happens in the economy and in the Middle East, we could see gold testing $1,000 an ounce, maybe even this quarter."The price jump helped gold stocks move higher Friday. The Amex Gold BUGS Index ($HUI.X) was up 1.4% to 475 on Friday. Newmont Mining (NEM, news, msgs), one of the biggest gold mining companies, was up 1.5% to $54.72. Since the end of 2006, the stock is up 21%.While the higher price could be good news for gold investors, it means sticker shock for consumers with a month left to find a gift for Valentine's Day.A gold necklace that sold for $80 last year is now retailing for $200, the Augusta, Ga., Chronicle reported. With retailers passing on the rising cost to consumers, sales are hurting.