Gold prices raced past the $1,300 an ounce barrier yesterday as investors piled into the ‘safe haven’ asset amid global uncertainty.
The commodity was last above the $1,300 mark in November 2016 and the last time it reached $1,325 – its intra-day high yesterday – was in September last year.
It comes as North Korea escalated geopolitical tensions by firing a ballistic missile over northern Japan for the first time since 2009.
Gold boom: The price of the precious metal has soared at the start of this week
The projectile passed over the Tohoku region and landed 700 miles east of Cape Erimo on Hokkaido and the Government told people in the city to take cover.
Meanwhile, South Korea has threatened to ‘exterminate’ North Korean dictator Kim Jong-un if he continues to risk the safety of its population.
The price of gold had hit a month low of $1,253 an ounce and is now up six per cent in just three weeks.
Gold investment firm, the Pure Gold Company based in London, claims there has been a 113 per cent increase in people purchasing physical gold this morning compared to average figures last week.
Josh Saul, chief executive of the firm, said: ‘We have been taking orders since 5am this morning from clients citing fears that tensions between the US and North Korea will escalate after North Korea’s latest missile test over Japan.
‘President Trump has vowed to respond with “fire and fury” and many of our clients believe this will make the situation considerably worse, increasing the unpredictability of the geopolitical situation.
‘Many of our clients purchasing physical gold this morning are concerned that many factors could further tip the market.
‘We have already seen the gold price jump by around on per cent this morning on the back of these fresh concerns.’
Racing ahead: How the price of gold has surged in the last 24 hours
The price of gold has increased by seven per cent since June. However, it is still way below highs recorded in October 2011, when it reached nearly $1,900 an ounce.
If the price continues to surge in the coming days and weeks, and tips over the $1,400 an ounce mark, it will be the first time since August 2013 that it has reached that level.
It had hit a low of $1,061 in December 2015.
It means the price has surged by a quarter in just 20 months.
Last year, economist James Rickards, claimed gold would soar in value in the coming years and cited cyber warfare as the number one reason people will pile into the commodity.
He says the 21st century cyber age poses risks to digital money and wealth to all investors and savers.
He explains that gold will climb to $10,000 an ounce if confidence in currency collapses, which he believes could happen as a result of another financial crisis
Investors tend to flock to gold in times of uncertainty because it is seen as a safe haven that will hold its value.
WAYS TO BUY GOLD
Savers have a number of ways of buying gold as an investment, writes Simon Lambert.
Physical gold is the main way to tap direct into actual gold, by buying bullion or coins.
This can either be done through a traditional dealer or through an online service such as GoldMadeSimple, or BullionVault. You can read more about how to do this on the World Gold Council’s website.
Exchange Traded Commodities are also a direct route into gold. ETCs, like Exchange Traded Funds, track a particular sector, or in this case commodity.
They are passive investments and should merely mirror gold’s moves, although some will offer leveraged returns or the opportunity to short the price.
Make sure you understand the difference between ETCs that are physical (actually buying gold) and synthetic (set up to mimic its price). Read this guide to ETFs.
Funds enable investors to buy into a basket of shares of gold miners, producers and associated companies.
However, the performance of individual firms does not always echo gold’s rises and falls, and in fact, gold mining shares can fare worse than the gold price – especially smaller companies.
Full guide: how to invest in gold