Dec. 27 (Bloomberg) -- Gold rose after a suicide bomb attack killed Pakistan's former prime minister Benazir Bhutto, sparking demand for the precious metal as a haven from political turmoil. Silver dropped.

The U.S. backed a partnership between Bhutto and Pakistan's President Pervez Musharraf in hopes of containing a growing Islamist threat in the nuclear-armed country. Before today, gold climbed 30 percent this year, heading for a seventh straight annual gain.

``This attack just ratchets up the political uncertainty in the region, in a country that has nukes,'' said Frank McGhee, head metals trader at Integrated Brokerage Services LLC in Chicago. ``There's a huge flight to quality. Gold and dollar- denominated assets are going to be the beneficiaries.''

Gold futures for February delivery rose $1.50, or 0.2 percent, to $831 an ounce at 9:39 a.m. on the Comex division of the New York Mercantile Exchange. The metal earlier gained as much as $5.20. The price is up for the fourth straight session.

Silver futures for March delivery fell 3.5 cents, or 0.2 percent, to $14.80 an ounce. Before today, the metal climbed 15 percent this year.

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

Last Updated: December 27, 2007 09:40 EST