Tuesday, 29th November 2005 (4052 views)

The price of gold has been driven over $500 an ounce for the first time in nearly 20 years, off the back of strong demand from safety-conscious investors concerned by global volatility.

Spot gold topped $500 an ounce for the first time since the end of 1987. In early afternoon Asian trading, gold stood at $501.50/502 an ounce.

Platinum has also hit its highest price since 1980, and breached the psychological $1,000 an ounce barrier.

Amid fears over global terrorism and possible inflation in the US for the forthcoming year, investors are looking for alternatives to government bonds. Many buyers see gold as a secure buy, particularly with further price rises forecast.

The World Gold Council announced this month that global demand in the third quarter of the year totalled 838 tonnes, a seven per cent rise on the same period last year.

As the price of gold approached $500, Asian dealers have reported rising sales of gold bars, jewellery and scraps.

Despite the recent surge, gold prices still remain well below record levels.

The current record price for gold was set in January 1980, when spot gold hit $873 an ounce.

 

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