NEW YORK/LONDON (Reuters) - Gold rose above $1,000 an ounce on Friday for the first time since March last year as nervous investors piled into the yellow metal to preserve wealth amid a tumbling stock market.

Bars of 250 gram fine gold are stored at a plant of gold refiner and bar manufacturer Argor-Heraeus SA in the southern Swiss town of Mendrisio November 13, 2008. REUTERS/Arnd Wiegmann

Long-term inflation worries fanned by the massive U.S. economic stimulus package signed by President Barack Obama this week has driven investors into gold, which is perceived as the most likely asset to hold its value against economic head winds.

“I think there’s a little bit of panic out there. Equities are setting new lows and gold is the place to run to. I don’t think there’s much more than that,” said Robert MacIntosh, chief economist at Eaton Vance in Boston.

Bullion continued to appreciate against other asset classes and commodities on Friday amid renewed fears that the U.S. government could be forced to nationalize banks amid a worsening financial crisis.

A ratio of gold against the S&P 500 index rose to its highest level since September 1990, and gold/oil ratio was at its loftiest since December 1998, according to Reuters data.

Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange settled up $25.70, or 2.6 percent, at $1,002.20 an ounce. They reached a session high of $1,007.70, their highest price since March 2008.

Spot gold hit a peak of $1,005.40, its strongest level since March 18. It was at $993.80 an ounce at 2:42 p.m. EST, up 2.0 percent against $973.75 in New York late on Thursday.

The metal is poised to rise further, possibly targeting last March’s all-time high of $1,030.80 an ounce, analysts said.

OPTIONS BULLISH

Gold options market also pointed to sharply higher prices of the metal.

COMEX gold floor trader Mihir Dange said that trading of December $1,200 call options were extremely active and that gold rising to between $1,200 and $1,300 by year end “was not unrealistic by any standard.”

Meanwhile, New York’s SPDR Gold Trust, the No. 1 gold exchange-traded fund commonly known as GLD, said its holdings rose nearly five tonnes to a record 1,028.98 tonnes on Thursday, while the iShares Silver Trust’s silver holdings climbed 18.4 tonnes to an all-time high of 7,892 tonnes.

U.S. equity markets tumbled as much as 3 percent to their weakest levels since November before they partially recovered. Falling stocks boost the appeal of safe-haven assets like gold.

However, analysts cautioned that profit taking could be possible in an overbought market.

“It’s a huge psychological level for traders. The fact that traders have become so bullish in gold, just like any index, we probably are looking at some kind of retracement in the future,” said Rob Kurzatkowski, futures analyst of optionsXpress.

Among other precious metals, spot silver was at $14.41 an ounce, up 2.9 percent from its Thursday finish of $13.01.

Spot platinum was at $1,081.00 an ounce, up 1.4 percent from its previous close of $1,066.50, while spot palladium was at $212.50, down 0.5 percent from its late Thursday New York quote.