Friday, 31st March 2006 (3599 views)

The value of gold reached its highest level since January 1981 yesterday to finish at $586.40 a troy ounce.

It marks the longest continuous rise in the price of gold since bullion was freely floated on the stock market in 1968.

One London-based trader told the Financial Times: "The bulls have now got $600 in their sights so we are likely to see a run at that level because there is a lot of money coming into the market."

The longest bull run of gold prices before the current sequence was experienced during the late 1970s, ending in January 1980, when the precious metal reached an all-time high of $850 an ounce.

Commentators say the rise in prices has been partly due to the rapid development in China where gold, amongst other metals, is being more widely used in industrial processes.

Overall this year the precious metal has made gains of around 12 per cent and investment demand is expected to reach 45.2 million ounces, according to CPM Group, a New York-based commodities market research firm.

The highest ever level of demand was recorded in 2003 when investors bought 50.2 million ounces of gold.

 

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