The spot price of gold has surged to the highest level for 16 years.
Analysts said gold had been boosted by a slump in the dollar caused by worries about the US economy following President George W Bush's re-election.
Gold's spot price jumped by $6.25 per ounce to as high as $433.10 in London today - the highest level since December 1988 - before falling back to $430.70 later.
The euro rose to the highest level against the dollar for almost nine months on the currency markets, nearing an all-time high, as Bush's convincing re-election victory provided only brief respite for the US currency.
Dealers instead returned to focus on the US's ballooning current account and budget deficits. The euro rose to as high as $1.2898, the highest level since February 18, when it reached a record $1.2929.
A weaker dollar makes gold, which is priced in the US currency on world markets, more attractive to buyers using other currencies. Gold is seen also as a good hedge against fluctuations in the value of the dollar.
