Gold has soared to its highest level since October 1999 as fund investors scrabbled for a sanctuary for their cash over rising tension on the India-Pakistan border.
This week tension between the India and Pakistan, Middle East violence and US warnings that another terror attack against it was a "near-certainty", have brought gold’s safe-haven status back into focus.
Gold soared through $319 an ounce today, hitting the $319.60 mark, heading towards levels last recorded on October 14th, 1999, when prices topped $322.65.
In uncertain times, when the dollar is floundering and stock markets are brittle, the smart money turns to gold as a safe-haven bet.
"Everything constructive is affecting gold. India-Pakistan is a factor, the threat of more terrorist attacks in the US is a factor. These are things that are moving investors further into gold as they lose faith in the stock markets," said Mr Peter Hillyard, senior manager at London's arm of ANZ Investment Bank.
The weakening dollar had earlier been key to gold's rise. The dollar has hit seven-month lows against the euro and five-month lows against the yen this week, making the metal more attractive to investors outside the United States.
Gold has risen 14 per cent since January. It shattered the psychological level of $300 an ounce at the end of March when Israeli forces reoccupied the West Bank following a series of Palestinian suicide bombers in Israel.