Gold: still the only serious safe haven

With demand for investments in gold still surging, the metal's eight-year bull run is far from over.

Talk about a gold rush. Last week the yellow metal jumped back above $1,000 an ounce not far off last spring's record of $1,033 before slipping back on profit taking, raising its gains to 45% since October. Gold usually moves inversely to the US dollar, but it has gained around 13% this year, despite the greenback rising by around 10% against the euro. What's more, it has hit new records in a range of currencies, including pounds (£690), euros and Canadian and Australian dollars.

There has been an unprecedented surge in investment demand, says Javier Blas in the FT. Investors in North America and Europe went on an "extraordinary shopping spree" for bars and coins in the final quarter of 2008, buying 811% more tonnes than a year earlier. Global retail investment jumped by almost 400%, with retail investors in France becoming net buyers of gold for the first time in 25 years. Inflows into gold exchange-traded funds (ETFs) have continued to surge this year. The gold holdings of the world's largest gold trust, the New York-listed SPDR Gold Trust (NYSE:GLD), has absorbed 10% of worldwide annual mine output in the past seven weeks. It is now the world's seventh-largest gold bullion holder, behind a handful of central banks.

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