Cautious investors push gold above $1,000

Gold prices moved to $1,000.75 an ounce this morning on investor concerns about inflation.

The metal, which is often used as a hedge against sharp price rises, last passed this barrier in March 2009.

Gold has also benefitted from the ’flight to safety’ caused by the credit crunch and economic downturn.

Consumers nervous about the financial position of banks and the volatility of the stock and bond markets have been looking to move their money into lower-risk assets.

Inflation concerns have also been stoked by the unprecedented measures imposed by central banks around the world, in order to limit the effects of the downturn.

For example, the Bank of England has cut interest rates to an all-time low of 0.5 per cent and will print £175 billion of new money through its ongoing quantitative easing scheme.

Private bank customers and other investors commonly move assets into gold by purchasing bars of the metal, which are then held securely by a separate company in exchange for a fee.

Sandra Close, an analyst at Surbiton Associates, told the BBC: ’Gold’s rising price is due to uncertainty all the way from personal investors right through to institutions.

’There are questions out there over the health of economies, where interest rates are going. All that encourages gold hoarding.’ADNFCR-2318-ID-19352884-ADNFCR