Rise in price of gold lures investors to haven assets

The dealing manager for GoldMoney said there had been a net sell on gold among its customers last week as they took advantage of the rising prices and took profit, but others bought amid geopolitical fears.

She said the price of the precious metal had been boosted by the double whammy of a weak dollar and rising tension in the Middle East.

Although the Federal Open Market Committee meeting cut another $10bn (£5.86bn) of asset purchases last week, the Fed’s moves did not have much effect on investors’ views of the market.

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However, Ms Kelsey said if the geopolitical risks in Iraq and Ukraine continue, there could be some interesting moves on the gold market soon.

She said there was also buying interest in platinum as the South African miners’ strike took a step back. She added: “The interesting trend among our customers was a big inflow again into Malca-Amit, Singapore and a significant decrease in our vault in Switzerland.

“This trend of shifting gold from the West to the East has been in play for some time now and we see no sign of it abating.”

In the week ending 19 June 2014, the price of gold rose 2 per cent to $1298 (£761), silver jumped 4.4 per cent to $20.29 (£11.09); platinum rose 1.7 per cent to $1463.60 (£859) and palladium added 1.2 per cent to $834.55 (£489).

Adviser view

Gordon Bowden, financial planner at Quainton Hills Financial Planning in Milton Keynes, said: “The case for gold is stronger than it was a few months ago. Uncertainty in the Middle East is making it a more attractive proposition for investors.”