Gold prices have been boosted by investor sentiment, it has been reported.
Continuing volatility on the global stock exchanges has led to many more investors putting their money into gold, it has been suggested.
Gold bullion, which is traded in New York, hit a four-month high of almost $988 an ounce earlier this week: not far off March's all-time high of $1,030. This also means that the metal is now almost 20 percent more valuable than it was at the beginning of this year, Reuters reports.
This trend has been reflected by the decrease of value in the equities markets, as the ongoing credit crunch continues to take its toll. Last month, the FTSE 100 index lost around ten per cent of its value, while the broader FTSE All-Shares index retreated by seven per cent. Moreover, global stocks also stand at a 21 month low.
Analysts suggest that the diverging gold and equities prices are due to many shares investors "jumping ship" and moving into the smaller, but safer, returns offered by precious metals. "Equity investors are not happy, and risk aversion is on the rise again," Tom Kendall at Mitsubishi told the news agency.
"I think it will hit $1,000 by the end of this year almost certainly, and quite possibly by the end of this month. There are a lot of investors looking at gold not as a no-risk asset but as a low risk asset."
Economist Jill Leyland at the industry-sponsored World Gold Council added: "Ever since the financial turmoil hit last August we've seen a lot of money flowing towards gold."
Moreover, the trend now seems likely to continue according to latest results from the futures markets, on which traders predict market behaviour over months to come. In Japan, gold futures hit 3,346 yen: a 25-year high.
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