Market turmoil sent gold on a rollercoaster ride in Asia today, rising more than 3 per cent after Wednesday's extraordinary leap in the price of bullion before later slipping back.

Investors fled the markets yesterday, shedding their paper assets and put their money in gold, the traditional safe haven during periods of financial insecurity. The rout in the financial markets sent gold up almost $90 per ounce, a 10 per cent surge and the metal's biggest single one-day gain.

Asian investors continued to pile funds into bullion in early trading on Thursday, extending the record run in gold values and brining the price to $892.10. However, the rally dissipated as the falling dollar began to stabilise after the US Government's rescue of American International Group. Spot gold fell below $860 per ounce and spot platinum dipped to $1.139 after earlier gains of 3 per cent to reach $1,155.

While gold remains buoyant, there is gloom in base metals with the price of copper continuing to sag as investors anticipate weak demand for the red metal, which is widely used in housing for wiring in the automotive sector. New home starts in the US fell to a 17-year low during August, according to US data.

Copper on the London Metal Exhchange fell $30 to $6730 per tonne.

Bullion traders will be watching India closely in the next few days, hoping to detect the mood in the run-up to Diwali, the Hindu festival in October and a favourite time for marriages. Gold purchases peak during the festival season but analysts are anticipating that the price surge may temper buying.

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