Gold hit another record high above $876 in trading in London late yesterday, as a softer dollar and a new rise in oil prices back toward $100 a barrel generated even higher levels of interest in the precious metal from investors looking for a safe haven.
Spot gold was up at $873.50 an ounce against $859.30 in late New York trades on Monday, having earlier hit a fresh all-time high of $876.55 an ounce.
Gold has risen by over $200 an ounce since the onset of the credit crunch in mid-August last year, as a trinity of factors have collided propelling it to a series of record highs.
The weak US dollar and a skyrocketing oil price have boosted the metal as market players look for an alternative to the most common form of cash reserves and a hedge against inflationary pressures, while the economic uncertainty emanating from the sub-prime debacle has seen gold reassert itself as a store of wealth in times of turmoil.
"Investor interest in gold remains buoyant," said analysts at Barclays Capital.
"Further safe haven buying is likely in the near term on the back of geopolitical tensions, higher inflation expectations and broader financial market concerns."
Yesterday, oil prices rebounded towards $97 a barrel after retreating from the recently hit $100 mark on profit taking and economic slowdown fears over the previous two sessions.