By Pham-Duy Nguyen

Jan. 29 (Bloomberg) -- Gold rose, erasing earlier losses, after a slide in U.S. equity markets sparked demand for the precious metal as a store of value. Silver also gained.

U.S. stocks halted a four-day advance as more companies posted poor earnings and jobless claims rose to a record last month. The U.S. House passed an $819 billion stimulus package to help ease the recession. Gold rose 5.5 percent last year as Standard & Poor’s 500 Index lost 38 percent.

“We’re seeing a bit of bounce in gold because of what the equity markets are doing now,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “Investors are backing out of equities and going to gold and other assets that are viewed as safer.”

Gold futures for April delivery rose $7.30, or 0.8 percent, to $897.30 an ounce at 10:34 a.m. on the New York Mercantile Exchange’s Comex division, after earlier touching $875.70. The contract fell 2.3 percent in the previous two sessions.

Silver futures for March delivery rose 5.2 cents, or 0.4 percent, to $12.015 an ounce. The metal slumped 24 percent in 2008 while gold gained 5.5 percent.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Last Updated: January 29, 2009 10:39 EST