Gold soared while the FTSE and the dollar slipped yesterday as fears of a recession in the US continued to mount.
Prices for gold broke through the 1,000 US dollar mark for the first time as the cost of the precious metal was driven higher by a weakening US dollar.
Investors have sought gold as a safe haven against the dollar's falling value amid expectations of further interest rate cuts from the Federal Reserve next week to spur on the spluttering US economy.
The soaring gold price heaps more pressure on firms such as H Samuel and Ernest Jones owner Signet - also facing tougher retail conditions in the UK and US.
The search for cover from the plunging dollar in commodities such as gold and oil came as global stock markets faltered yesterday. And the US commerce department added to the gloom after revealing a worse than expected decline in retail sales during February, fuelling more fears that the world's largest economy is on the brink of recession.
At one point, the FTSE 100 Index was more than two per cent lower - tracking overnight losses on Wall Street and in Asia - as confidence over the credit injection announced by five central banks earlier this week to ease the freeze in money markets faltered. The FTSE 100 Index later closed 84 points lower at 5692.4, a fall of 1.5 per cent.