GOLD prices hit a five year high yesterday, spurred by technical buys and fears of heightened inflation following a new drop in key US interest rates. Gold was at $410.10 (£263) up $4.50 from Wednesday's close.

The upward movement was mainly technical and investment funds tried to push prices up "as far as possible", according to Mr Ted Kempf, an analyst with the CPM Group. Funds have been behind the gradual rise in prices in past weeks.

Mr Kempf said part of the interest in gold comes from investors who want to divest 1995 earnings from the stock and bond markets.