Gold prices burst through $500 a troy ounce for the first time in18 years yesterday on a wave of buying from Japanese private investors, but fell back quickly after trading in Asia finished.

The price of gold bullion has been rising since 1999, marking its longest upward run since it was freely floated in 1968. But its recent run to record levels has come as the dollar has risen to two-year highs against key currencies and oil prices have fallen - two factors that would normally drag gold prices lower.