Gold reached its highest price in nearly six years this morning as fears of a war in Iraq sent investors scurrying for a safe haven for their money.
Spot gold traded at $360.25 an ounce, its highest since March 1997 and up from New York's last quoted $357.10/357.60 level yesterday.
Investment uncertainty, now heightened by fresh weakness in the dollar in international currency markets and more losses on Wall Street, traditionally favors gold.
Momentum for war appeared to be growing as President Bush said yesterday that Baghdad was clearly not disarming and that time was running out.
"Whilst geopolitical tension continues to rise it is hard to make a case for a retreat in the gold price, especially if the US dollar continues to weaken," said John Reade, metals analyst at UBS Warburg.
Gold also gained after the Russian news agency Interfax reported that the Russian armed forces have obtained information that the United States and its allies had already decided to launch military action in Iraq from mid-February.