LONDON, Oct 6: Gold prices rose nearly 5 per cent on Monday, leading other precious metals higher, as a slide in stock markets sparked a flight to safety.

In euro terms, the metal reached 645.33 euros an ounce, its strongest since late March, when it hit a record high of 651.54.

Traders largely shrugged off the effects of a firmer dollar and weaker oil prices -- usually the main external drivers of gold -- which should have pressured the metal lower. Platinum, silver and palladium all posted gains in gold’s wake.

Spot gold was quoted at $873.50/875.50 an ounce up from $834.80 in late New York trade on Friday.

There is a flight to gold as a safe haven again today, which is supporting prices, said Dresdner Kleinwort consultant Peter Fertig.

The factors which normally drive gold are heading lower, except the stock markets, and the rising risk aversion of investors. US stocks slid at the open, reflecting losses on European markets earlier in the session, as the widening fallout from the credit crisis spooked investors.

Losses on the equity markets typically spur buying of alternative assets, such as bullion.

The precious metal also benefited from strong demand from smaller investors for investment coins and bars.

We feel extremely positive on gold prices as investors rush to buy gold coins as protection against further market volatility, said Fairfax analyst John Meyer. Gold seems so much more tangible an investment than many other instruments and is not vulnerable to rising supply, he added. Gold looks good in an inflationary environment. Gold largely shrugged off dollar strength. The US currency hit a 13-month high against the euro as investors worried about the outlook for European banks after leaders decided against a common bank bailout plan over the weekend.

Gold usually moves in tandem with crude, as it is often bought as a hedge against oil-led inflation.

Silver ETFs have proved popular in recent months as lower silver prices attract more retail investors to the market.

Spot silver was quoted at $11.27/11.37, up from $11.09 in late New York trade on Friday.Among other precious metals, platinum tracked gold higher, rallying more than 3 per cent to $984.50/1,004.50 an ounce from $950. Palladium climbed to $197/207 an ounce from $194.

—Reuters