Gold price reaches record high

The price of gold has hit an all-time high of 1,106 US dollars an ounce, jumping 5.5 percent over the past month. Analysts say two main factors underlie the bull run.

To begin with,gold prices received a boost from the easing of monetary policies worldwide to cope with the financial crisis, raising fears of inflation. As a result, gold has increasingly been seen by investors as the best hedge against inflationary pressures. The US Federal Reserve has also announced recently that it will keep its interest rate low, further enhancing the attractiveness of gold. An additional factor has been the news that India's Central Bank has bought 200 tons of the precious metal from the IMF at 1,045 US dollars per ounce,setting gold's price floor.Analysts predict that demand will continue to grow, making future price hikes likely.

Qin Weihua, researcher of Beijing Gold Economy Development Research Center, said, "The US will not raise the interest rate, at least before the end of the year. Because gold has no interest income, it usually gains when the US dollar's interest rate is low. If the US dollar has 4 to 5 percent of interest, people will choose to hold US dollars. "

Tao Xingyi, president of Jinding Gold Investment, said, "There is strong demand for real gold. We can see from July to October that demand is rising, along with the gold price hikes. It shows that the gold price is supported by the turnover. As a result, many investors are confident about the future trend of gold prices."