The price of gold soared by $20 an ounce in New York yesterday as investors rushed to shield themselves from possible crisis in the world financial system in the wake of Mexico's near-bankruptcy.

A wave of panic buying, which began on Thursday, pushed the gold price up by nearly $50 an ounce in two days to its New York close of $457 yesterday. Markets around the world have been rocked by rumors that more Latin American countries are having difficulties meeting their debt payments, threatening the many commercial banks with money at risk in these big debtor nations.

The resignation this week of three central bank heads--in Mexico, Argentina and Chile -- fueled speculation about debt problems.

Several bankers now are concerned that growing fears about the risks of international lending will feed on themselves. Many indebted nations rely on a flow of new loans to keep up payments on their existing debt. If bankers are scared off from committing new money, this by itself could force nations into a crisis. "Anything at this point that would improve borrowers' ability to get money in a crisis" would help, one banking economist said yesterday.

The "Eastern European effect" -- so-called because bankers became nervous about lending to all Eastern European countries because of Poland's inability to meet its debt payments -- is now spreading to Latin America, the economist said. Because the commercial banks have lent billions of dollars to South American countries, any problems there are more dangerous to the world financial system than those in Eastern Europe.

The dollar initially was weakened by yesterday's panic because U.S. institutions are most involved in South American lending. However, it recouped its losses in thin trading in New York and ended the day higher.

After crashing below $300 in June, the price of gold has risen almost to the levels of a year ago. In London yesterday, the metal climbed $48 from Thursday's close, finishing at $457.5.

Silver also climbed swiftly yesterday. It settled on the New York Commodity Exchange at $8.96 an ounce, up from $8.45 on Thursday.

There was little change in the dollar in London, where the pound closed at $1.7280 against $1.7275 Thursday night. In New York the pound closed at $1.733. In Tokyo the dollar closed the week at 256.40 yen, down from 258.30 Thursday. It closed at 257.25 yen in New York trading.