Gold price increase 'could challenge record high'

Increasing demand from those looking to invest their private wealth in a safe haven asset could help the price of gold come close to a record high this month.

This is the view of managing director of CWA Global Markets Peter McGuire, who was quoted by Reuters as saying the precious metal has ’seen a very strong move to the upside’ over the past few weeks.

’We could see $1,265 (£860) [per ounce] this month,’ he added, noting geopolitical tensions in countries like Iran, Israel and Korea may cause investors to target the asset, which is seen as a hedge in times of uncertainty.

Spot gold reached the highest price in almost two weeks during trading in New York on Tuesday, touching $1,230 after the European Central Bank warned the banking sector in the eurozone could be at risk of exposure to the current debt problems.

The metal reached an all-time high in early May, beating the previous record set in December 2009.ADNFCR-2318-ID-19815612-ADNFCR