Gold price heads past $1,500

Investors seeking asylum from distressed bond and currency markets have pushed the price of gold beyond the $1,500 mark for the first time. The all-time high was reached as the dollar sank again in trading: gold often moves in inverse relation to the greenback as it is traditionally priced in the US currency.

However, adjusting for inflation, the price of an ounce of gold remains below the real-terms peak of over $2,300 in 1980 – which was also a time of heightened geo-political tensions, especially in the Middle East.

That, though, was a short-lived bubble, and the rise of gold has been vertiginous in recent years – up 30 per cent in 2010, fuelled by Asian demand and fears of inflation.

Many observers are pointing out that, with the major reserve currencies of the world suffering from various forms of malaise, precious metals are once again emerging, de facto, as currencies – as stores of value, if not a means of exchange.

The gold sold by the Treasury in 1999 would now be worth more than £13bn, against £2bn then.