NEW YORK (MarketWatch) -- Gold futures closed above the key $1,000 mark Friday for the first time in nearly a year, with the global financial and economic worries boosting the safe-haven appeal of the precious metal.

Gold for April delivery finished at $1,002.20 an ounce, up $25.70, or 2.6%, on the day. It earlier touched a high of $1,007.70.

With rising fear that the U.S. government may nationalize some banks, blue-chip stocks hit fresh bear-market lows before recovering Friday afternoon, with the Dow Jones Industrial Average DJIA, -0.47% recently down 43 points at 7,305.

“ 'While gold has become overbought in the short term, its medium- and long-term fundamentals are as sound as ever.' ” — Mark O'Byrne, Gold and Silver Investments

"There is a risk here of a panic sell-off in stock markets, and the next leg down in the stock bear market looks imminent, as the ills of the global financial system virulently infect the global economy," wrote Mark O'Byrne, executive director at Gold and Silver Investments Limited, in a research note. "While gold has become overbought in the short term, its medium- and long-term fundamentals are as sound as ever."

Gold for February delivery, the front-month contract that registered very little volume, finished up $25.70, or 2.6%, at $1,001.80 an ounce on Globex. The February contract expires on Feb. 25. Earlier, February gold hit an intraday high of $1,000.40 an ounce.

On Thursday, the Dow industrials finished at 7,465.95, down 89.68 points to end at the weakest level since Oct. 9, 2002.

"The price slide of U.S. equities, with the Dow Jones Industrial Average falling to its lowest level since October 2002, should result in a continued positive mood of investors on gold," according to Eugen Weinberg, an analyst at Commerzbank.

Also on Globex Friday, March silver futures rose 55 cents, or 4%, to $14.49 an ounce, and April platinum futures gained $13.60, or 1.8%, to $1,095.70 an ounce.

March palladium futures fell 5 cents, while March copper futures fell 6 cents, or 3.9%, to $1.42 a pound.

What's next for gold?

With markets lacking a clear direction since the passage of the U.S. economic-stimulus and bank-rescue plans, many analysts see a short-term return to risk aversion, which should continue to benefit gold.

"However, we expect a short period of consolidation before prices embark on a test of the all-time high at $1033.90," said Tom Pawlicki, precious metals analyst at MF Global.