Gold Tops $500 in Asia

Not the most confidence inspiring development. . .

TOKYO -- Gold prices broke through the critical threshold of $500 an ounce in Asian trading Tuesday for the first time since late 1987, driven by investor demand for the metal as a diversifying asset. Prices retreated in later trading.

A fourth consecutive day of strong Japanese buying sent gold above the milestone, traders said, bringing the metal's gains to 10 percent in less than four weeks.

Spot gold rose as high as $502.80 per troy ounce in intraday trading before slipping back to settle at $499.20 in New York trading.

December gold futures settled on the New York Mercantile Exchange at $499.10 an ounce, up 80 cents from the previous day.

December silver was 5.7 cents lower at $8.296 an ounce.

Gold's appeal as a hedge against currency weakness, inflation and financial instabilities in general has driven the recent rise in prices, traders said.