By Alan Fein

(AXcess News) New York - Concern over the survival of the US financial market thanks to the bankruptcy of Lehman Bros. and sale of Merrill Lynch has sent panic through the global marketplace that in turn is pushing the price of gold higher.

December gold futures rose $21.00 per ounce in early afternoon trading in New York to trade at $785.50 following news of Lehman Brothers Holdings Inc. bankruptcy filing Monday morning after a failed sale of the company to Barklays Plc and Bank of America over the weekend.

Silver futures for December climbed 24 cents to $11.04 per ounce.

Platinum futures rose $58.30 per ounce with December contracts trading at $1,210.50.

Gold, considered a 'flight to safety' investment, was living up to its name Monday following the collapse of Lehman Bros. sale.  Making matters worse was the successful sale of fellow major investment bank Merrill Lynch that between the two giants of Wall Street shattered confidence in stocks with the Dow losing over 300 points in early morning trading as a result.

Meanwhile, crude oil, which like gold trades in dollars, fell more than $4.49 per barrel to break the $100 barrier, with October contracts trading at $96.69 per barrel - and nobody seemed to care.  Instead, President Bush made an appeal to the public 'not to worry about their investments', that the US financial market was secure.  Still, investors worldwide thought otherwise and moved to hedge their bet against the dollar and buy gold.

But global investors weren't too concerned or gold futures would have ran to record highs in one-day trade comparisons, one metals expert told AXcess News.

Standard Bank metals analyst Manqoba Madinane gave an international perspective on Lehman's bankruptcy this morning before the market in New York opened saying, "This news has shaken up financial market risk, and precious metals reacted with uncertainty."

Madinane said a correction in the dollar was long in coming and "supported precious metals, albeit with some investors choosing to err on the side of caution" as the greenback slid from $1.4042 against the euro, in early Asian activity, to $1.4322 in aftermarket electronic activity in New York.

The commodity analyst for Standard Bank noted that Friday's drop in the dollar "may have been overdone" and "should keep precious metal investment sentiment cautious today as investors search for more dollar clues."

Yet Madinane's take on oil is that "it's due for a correction", meaning the commodity analyst sees prices rebounding.  But that wasn't the case in New York where crude oil broke in a downward slide as the financial crisis on Wall Street became more supportive of a prolonged economic slowdown that would lower demand even further.

"Further dollar weakness today, coupled with strong DOE demand data last week, should position crude oil prices for a rebound - which should anchor precious metals today," Madinane said.

Gold opened just below $750 in Asia and remained well supported throughout the London trading session - rising to $757 before easing to $750 at the PM fix as investors locked in profits. Prices regained support in New York on speculative trading as hurricane Ike approached the Gulf of Mexico, with prices settling at $761.50. Primary support for gold is at $768, with $756 - $734 providing secondary support. Primary resistance is at $789 - $797, and secondary resistance at $818.

Silver, gripped by market uncertainty, bounced between $10.58 and $10.92 throughout the day - settling at $10.72 in New York. Upside potential should gain momentum today. Support for silver is at $10.96, with $10.89 and $10.71 as possibilities. Primary resistance is at $11.14, with secondary resistance at $11.25.

Platinum, as anticipated, endured a technical rebound - climbing to $1,204 at the New York close, from $1,153 in early Asian activity.