Gold hits record high of $1,458.80

Gold sets another record high this year as it continues its upward trend. Many investors are still encouraged to buy gold because experts still agree that there will be more upward movement from the metal.

Inflation and unrest in the Middle East has also encouraged investors to buy gold

Alex Hawkes
Wednesday 6 April 2011 10.19 BST
Guardian.co.uk

Gold hit a record high on Wednesday as precious metals soared in value, driven by a falling dollar and investors seeking traditional safe havens.

Bidders for the precious metal were offering $1,458.80 per ounce on Wednesday morning. Silver also strengthened to a new 31-year high of $39.48.

The weaker dollar was partly responsible for the rise in gold. Since the price is denominated in dollars, if the dollar falls the price becomes relatively cheaper to investors holding other currencies.

Minutes from the Federal Reserve's interest rate deliberations last month pushed the dollar down further on Tuesday as it became clear that there was unlikely to be an interest rate hike any time soon.

Inflation and unrest in the Middle East has also encouraged investors to buy gold, long seen as a refuge in times of war.

The price of gold has soared in the last few years, dipping only during the financial crisis. It has gained more than 5% since the middle of March.

"Tensions in the Middle East and north Africa are not solved yet. Secondly, there are new uncertainties in the eurozone. These all will benefit gold," Ronald Leung, of Lee Cheong Gold Dealers in Hong Kong, said.

Silver and gold prices have also been boosted by traders looking for a hedge against inflation.

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