LONDON, Sept 25: Gold jumped to its highest level for more than seven years on Thursday morning, as a surprise decision from Opec on Wednesday to cut oil output combined with a weak dollar to burnish the metal’s allure as a safe-haven asset.

“The bulls have got the bit between their teeth and any news is good news — it doesn’t matter what it might be, it’s good news,” Societe Generale economist Stephen Briggs told Reuters.

Share prices dropped on concerns that higher oil prices could jeopardise an economic rebound in the United States.

Speculators then jumped on the bandwagon in European trading, to take gold up to $392.25 a troy ounce — its highest since mid-May 1996.

“The hedge funds drive the market and it’s a very small market in global terms — nobody suffers if it goes up, the interest with all the traders and the investment community is for it to go up,” Briggs said.

By 1048 GMT, spot gold was at $391.80/392.50 per troy ounce compared to $387.00/387.80 at the New York close on Wednesday.—Reuters