Gold approaches $1,000 an ounce

The gold price has risen to its highest level in six months, as stock markets waver and investors move to hedge their portfolios against inflation.

The metal hit $992 a troy ounce this week. Analysts at GoldCore, the bullion dealers, said they expected investors to take profits once the price hit the psychological mark of $1,000. However, Standard & Poor’s said many analysts believed it would rise above this level. The gold price last exceeded $1,000 in February.

Demand for gold soared last year as investors sought a safe haven from the stock market falls and global economic uncertainty.

Investment demand was lower in the second quarter this year than it had been in the previous three quarters but still remained “very strong”, according to the World Gold Council (WGC). Retail investment in the second quarter was up 12 per cent on last year.

Investors can buy gold through exchange traded funds, bars or coins. It is commonly used as a hedge against inflation but other metals can offer similar protection.

Nick Price, a fund manager at Fidelity, said platinum, which is used in the motor industry, could be a more attractive long-term hedge against inflation as the economy comes out of recession and global car production rises.

● Ascot Mining is offering investors a special deal on gold as part of its attempts to expand its mining production. Investors willing to buy at least 10 ounces can buy at 20 per cent less than the market price, with gold delivery 12-18 months later.