After a 27-year hiatus, gold returned to the lofty price of $800 an ounce yesterday. But that number was unlikely to shock anyone — investors or even consumers hankering for a 14-karat necklace.

Gold has surged more than $100 an ounce in two months as a weak dollar, high oil prices and concerns about world tensions have increased the allure of precious metals as a safe investment. The Federal Reserve’s decision to lower its benchmark interest rate for the second time in as many months helped vault gold futures yesterday.

The sharp rise in prices hasn’t scared off investors — quite the opposite, according to George Milling-Stanley, spokesman for the World Gold Council.

“One of the things that has characterized the bull market since April 2001 is that investors have perceived every dip in the price as a buying opportunity,” Milling-Stanley said. “They have perceived gains also as a buying opportunity.”

Jewelry demand isn’t expected to suffer much, either. Gold would have to top $2,000 an ounce to reach the inflation-adjusted peak of 1980.

Gold gained $7.50 to settle at $795.30 an ounce on the New York Mercantile Exchange, then climbed to a peak of $800.80 in later electronic activity. Read Full Article