Monday, 9th January 2006 (4673 views)

The price of gold rose to its highest level since 1981 today in Asian trading, with investors responding to news that interest rates in the US are close to peaking.

The spot price of gold rose to $544 an ounce, its highest level since March 1981 when the price stood at $547.25.

Analysts are predicting that a price of $600 an ounce may be possible in the first half of 2006 as uncertainty over the US dollar and inflation drive investors to seek safer funds.

Investment dollars are being channelled into gold by fund managers seeking to ride a boom in the commodity market.

Mining shares in Australia soared on the price rise, with the country's largest gold producer Newcrest Mining gaining close to five per cent and shares in Papua New Guinean producer Lihir rising by six per cent.

Speculation across Asia suggests that central banks across the region, particularly China's, are seeking to increase their gold reserves.

 

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