Gold booms as a haven from risk

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The Independent Online

The price of gold hit a record of nearly $1,260 an ounce as momentum triggered by buying of the metal as a haven from sovereign and financial risk pushed prices higher yesterday.

Spot gold hit $1,257.85 an ounce in London. The price of the commodity has risen by nearly 15 per cent since the end of 2009, fuelled by sovereign risk in the eurozone, low interest rates and concern about the stability of paper currencies.

"Sovereign debt worries, central banks raising their holdings and record low interest rates keep attracting new buyers to gold," said Ole Hansen, a senior manager at Saxo Bank. "The Goldilocks scenario continues. Risk-off helps gold through safe haven [buying], risk-on helps it as well, through a weaker dollar."

The dollar fell to three-week lows against the euro.