Monday, 17th March 2008 (3064 views)

The price of gold broke the $1,000 (£493.75) per ounce barrier for the first time in London on March 14th, continuing its record-breaking rise since the start of the year, the World Gold Council (WGC) has confirmed.

The organisation added that over the past 12 months, gold prices have increased by 52 per cent, while demand for gold has hit an all-time high of $79 billion.

It said there were short-term and longer-term issues behind the rise in gold prices, which have shown bullish performance since January when the 1980 record of $850 per ounce was broken.

Among the short-term effects are the continuing weakness of the US dollar and a "flight to quality" by investors looking to protect themselves against global economic turbulence.

British financial analyst Jeff Randall recently wrote in the Telegraph that gold has been an investment "safe haven" for over 5,000 years - and remains so to this day.

However, WGC chief executive James Burton said longer-term issues, such as increased gold mining and sustained growth in the demand for jewellery, were also underpinning the yellow metal's robust market performance.

During 2007, worldwide jewellery demand set a new record for the third year in a row, hitting $54 million.

 

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