Gold hits record high
• Falling dollar pushes up gold price
• Sterling and oil also rise
The dollar came under pressure after Friday's worse-than-expected US jobless data and the G20 meeting at the weekend reinforced expectations that American interest rates will not rise any time soon.
Gold hit $1,108.05 an ounce this morning Photograph: Siphiwe Sibeko/Reuters
This pushed the spot price of gold, seen as a safer investment, to a new record of $1,108.05 an ounce – and extended last week's gains of almost 5%.
Sterling also rose, hitting a three-month high against the dollar today of $1.6800. Other precious metals such as silver, platinum and palladium also firmed, while crude oil rose nearly 2% in early trade.
Despite these record prices, there is no shortage of buyers for gold. Last week India's central bank bought 200 metric tonnes of gold from the International Monetary Fund for $6.7bn, triggering speculation that other countries would follow suit.
"The long-term positive argument [for gold] is still in place and mainly centres on weakness in the dollar, a lack of faith in US intention to support it, and hedge fund buying," said analysts at MF Global.
Gold has increased by 5.5% in the past month while the dollar has lost 1.5% against a basket of six major currencies. Yesterday China, which holds more US treasury bonds than any other country, urged America to exercise its fiscal responsibilities.
"I hope that as the largest economy in the world and an issuing country of a major reserve currency the United States will effectively discharge its responsibilities," Chinese premier Wen Jiabao told a press conference in Egypt.
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