In dollar terms the gold price is about 5pc below its record, but the weakness of the pound and the euro against the American currency means that for investors in Britain and the eurozone the precious metal has never been so valuable.
The price of an ounce of gold has reached record levels of £754 and €865 in recent trading, and the dollar price has reached a three-month high of $1,157.
In August last year the gold price in sterling terms was £562, so British gold investors have made a profit of 34pc, compared with a rise in the dollar price of 23pc over the same period.
Gold is seen as a safe haven investment but, because it is priced in dollars, investors in countries other than America are exposed to currency risk.
For example, British gold investors saw the value of their holdings fall by 10pc in the six months to August 2009 as the pound recovered strongly against the dollar – even though gold in dollar terms appreciated by 2.2pc over the period.
Nicholas Brooks of ETF Securities, which runs a gold exchange-traded fund, said: "The strong performance of gold, despite the strength of the US dollar, indicates that investors are increasingly viewing it as an alternative store of value, not just to the US dollar but to fiat [paper] currencies more broadly, as sovereign risks continues to rise.
The above snippet comes courtesy of the Telegraph.co.uk
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