Russian plans push gold price to 18-year high

The price of gold hit an 18-year high today after Russia revealed plans to double the quantity held in its central reserves.

Heavy buying from investors helped the precious metal rise to 487.50 US dollars an ounce, after recording its largest one-day rise for three months yesterday.

Experts said the price was set to rise further, with the key 500 US dollars barrier now well within sight.

Martin Potts, mining analyst at Teather & Greenwood, said Russia’s plans, which were announced earlier this week, contributed to the current surge in gold prices.

Russia has about 500 tonnes of gold in its reserves.

He said: “Another 500 tonnes is equivalent to about three months of global production or around three years of Russian production.”

Prices have also recently risen on the back of renewed fears over inflation in the United States, as traders move their investments into safer areas.

Mr Potts said he expected the price to move further, adding: “It will certainly hit 500 dollars without any trouble.”

Experts at Barclays Stockbrokers said: “Provided gold builds value above 475 dollars, we would expect the uptrend to press on next to the psychologically-important 500 level, and beyond that to 510 by the year end.”