Gold prices raced to a record high yesterday as the escalating violence in Libya sent shockwaves through the financial markets.
The precious metal – a safe-haven for panicking investors at times of uncertainty – breached $1,440 an ounce as Colonel Gaddafi's bloody regime clung to power.
After touching $1,440.32 an ounce shorly before 5pm, it slipped back today and was at $1,423 by 2.30pm.
Oil prices were also on the rise yesterday and silver hit a 31-year high as the wave of revolutionary unrest sweeping North Africa and the Middle East threatened to spread.
Brent crude today was at $114.50 a barrel by mid-afternoon having been as high as $117.81 yesterday.
The surge in the price of gold underlined the folly of New Labour's decision to sell-off 400 tonnes of gold for less than $300 an ounce in 1999 shortly after coming to power.
The gold price has more than quadrupled since then and has risen ten per cent since January this year alone as anti-government protests spread from Tunisia and Egypt across the region.
'Markets are running scared from the uncertainty arising from events in the Middle East,' said Philip Shaw, an economist at investment bank Investec in London.
'Gold is a natural place to turn especially given the possible scale of upheaval in the region.'
