Monday, 5th February 2007 (5305 views)

Gold proved popular in 2006 as its price rose by 24 per cent, according to new research from Clerical Medical.

The new figures show that this increase was the largest yearly rise since 2002 and signals a return to strong global demand for gold. Over the past five years, the price of gold has rose from $277 per ounce (£140.78) to $635 (£322.7) per ounce in 2006 - equalling an average rise of 18 per cent and outperforming the FTSE All Share Index.

Rob Devey, managing director of Clerical Medical, explained: "Gold has returned to favour in recent years. Over the past five years, gold has outperformed the stockmarket, bucking the longer-term trend."

He added: "An uncertain geo-political backdrop encouraged strength in the gold price in 2006. A combination of US dollar weakness and renewed inflation fears has also contributed to recent gold price increases."

Ongoing global uncertainty throughout 2006 also encouraged many investors to opt for gold, especially following a weakening of the US dollar and fears over possible inflation increases.

 

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