SPOT GOLD PRICES leapt once again in London trade on Wednesday, reaching $915 an ounce for US investors as the US Federal Reserve led a co-ordinated cut of 0.5% to major world interest rates.

Currencies were left little changed against each other, but the Gold Price in British Pounds jumped to a new all-time record above £525 an ounce.

For French, German and Italian investors, the Gold Price in Euros also broke new all-time highs, gaining 3% to €670.

Stock markets halted a fresh plunge on the news after closing more than 9% lower in Tokyo . Germany's Dax index had earlier dropped almost 8% in Frankfurt, sinking to a new two-year low.

Short-term government bond prices pushed higher still as interest rates fell. But longer-dated government debt – more vulnerable to long-term inflation – ticked lower.

"Financial markets, specifically equities, are in the worst trouble since the 1929 Depression," notes Walter de Wet at Standard Bank in Johannesburg.

"Gold is still benefiting from the turmoil."

Holding near a one-week high of $915 per ounce, Gold Bullion today stood almost one-quarter above the 11-month low it hit in early Sept.

Here in London, the FTSE100 index has now dropped 15% of its value since then. The S&P stock index in New York has lost more than one-fifth.

"Inflationary pressures have started to moderate in a number of countries," claims the Federal Reserve in its unscheduled announcement, while "the recent intensification of the financial crisis has augmented the downside risks to growth...

"Some easing of global monetary conditions is therefore warranted."

The co-ordinated cut of 0.5% aims to make borrowing money cheaper across North America and Europe, with the European Central Bank (ECB), Bank of England, Swiss National Bank, Swedish Riksbank and Bank of Canada joining the Fed.

But it also makes the returns paid to cash savers worse, pushing the real rate of interest in the United States down to minus 4.1% after accounting for the cost of living – its worst rate since July 1980.

Yesterday the US central bank invoked emergency powers to start buying 3-month company debt directly, hoping to help ease lending to businesses with tax-payers' cash.

The so-called "commercial paper" market in the US has shrunk by one-tenth since July, now totaling some $1.6 trillion, of which the Fed can bid for $1.3 trillion.

Today also saw G8 governments throw money at their biggest banks, with the UK Treasury promising up to £250 billion ($437bn) in "Tier 1 capital" cash injections to shore up London's eight largest institutions, plus another £250bn of extra credit.

Spain announced a €30 billion rescue package for its finance sector, guaranteeing all cash deposits up to €100,000. Iceland secured a new €4bn loan from Russia.

Russian president Dmitry Medvedev in turn raised his rescue package for Moscow's banks to $190 billion, but failed to stem a fresh 6% drop in the RTS index.

"Gold will still continue to gain safe-haven interest," reckons Simon Weeks, head of precious metals at Nova Scotia Capital, speaking to Reuters.

"I do not think the cuts will solve the situation. It will help smooth the situation, but I don't think there are any miracle cures at the moment."