Gold on riseas investors go in search of safe haven

Gold prices hit a fresh record high yesterday as global recovery fears sent investors flocking to safe haven investments.

Concerns over further money-boosting efforts to support the flagging economy in the United States saw the precious metal reach an all-time high of $1,282 (825) an ounce at one stage.

Gold has raced higher as investors believe it will keep its value better than currencies.

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The dollar in particular has been under pressure amid speculation the US government will print more money under its quantitative easing programme.

Silver has also risen to its highest level in more than two years in recent days as defensive assets continue to soar in popularity and amid historically low interest rates.

There has been mounting worries that central banks in both the UK and US will rekindle their quantitative easing schemes as the recovery wobbles in the third quarter.

Paris-based think tank the Organisation for European Economic Co-operation warned this month that G7 economies may need to take further action to support growth, such as quantitative easing, after saying the recovery had slowed more than expected.

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The recent surge has helped gold to rise more than 17 per cent since the start of the year.

Currency expert Eric Viloria of Forex.com said moves by governments to devalue their currencies to protect their export industries had further fuelled the gold rally but he cautioned that gold prices may remain volatile.