Jittery investors boost gold prices

Lingering concerns about the European sovereign debt crisis, coupled with the threat of inflation, underpinned demand for gold yesterday, with prices hitting record highs in euro and sterling terms.

Spot gold hit a record of $1,248.15 amid worries that EU moves to stem the crisis in Greece and allay fears about Portugal and Spain may not succeed. In sterling terms, the yellow metal, which is viewed as a safe-haven investment, rose to a record high around £841 an ounce.

"Gold is the ultimate store of value and the best hedge against sovereign or inflation risks," VTB Capital said. "The rush of investors into gold is unlikely to abate anytime soon, especially now that traditionally hawkish eurozone central bankers may have to engage in quantitative easing."