Gold hits record high near 1,278 dollars

16th September 2010, Comments 0 comments

The price of gold struck an all-time high close to 1,278 dollars on Thursday as investors seek safety against a fragile economic recovery.

Gold hit a record 1,277.90 dollars an ounce at 12:30 pm (1130 GMT) on the London Bullion Market. It stood at 1,277.53 dollars at 1:07 pm.

The metal has been chalking up a series of record highs this week, hitting almost 1,275 dollars on Tuesday to break June's 1,265 dollars.

Gold is seen as a safe haven investment and also a hedge against inflation.

"It is investment demand that drove prices to fresh highs and it could well push it to 1,300 dollars but it is getting to the point where many will be seeking to book profit also as (supply and demand) fundamentals fail to justify gains from here," said VTB Capital analyst Andrey Kryuchenkov.

Metals consultancy GFMS expects gold to top 1,300 dollars before the end of 2010.

London-based GFMS on Tuesday said demand from investors had been the prime driver of the gold price's rally during the first half of the year.

"Gold certainly lived up to its reputation as a safe haven in troubled times," GFMS chairman Philip Klapwijk said in the group's latest annual survey of the precious metal.

"Just look at the explosion in investor interest that followed the sovereign debt crisis unfurling in Europe," he added.

The EU on Monday warned that fears of a resurgent eurozone debt crisis were likely to stunt European economic growth prospects this year.

© 2010 AFP

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