Gold hits record high above 1,269 dollars

14th September 2010, Comments 0 comments

The price of gold, a safe-haven investment in times of economic uncertainty, struck an all-time high above 1,269 dollars an ounce on Tuesday.

Gold hit 1,269.45 dollars on the London Bullion Market at 1410 GMT, beating the previous record of 1,265.30 dollars an ounce struck on June 21.

"Renewed sovereign debt concerns" have driven up gold, said Robin Bhar, senior metals analyst at Credit Agricole bank.

Fears of a resurgent eurozone debt crisis are likely to stunt European economic growth prospects this year, the EU warned on Monday.

"The global recovery is still expected to be uneven and is surrounded by major uncertainties," the European Commission said in its autumn forecast, citing "the resurfacing of global imbalances, high debt levels and lingering tensions in sovereign-debt markets."

Gold, whose two main drivers are jewellery and investment buyers, is also regarded as a good store of value in times of high inflation.

Amid rising bullion prices, the International Monetary Fund last week said it was selling gold worth around 403 million dollars to Bangladesh.

The Washington-based institution has been selling gold as it seeks to bolster its finances amid the global economic crisis.

IMF members agreed in 2008 that the fund could sell an eighth of its gold assets in order to diversify its financial model. The fund is one of the world's largest holders of the precious metal.

© 2010 AFP

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