As the economy shakes with uncertainty so investors are fleeing to the relative safety of gold prices, which on Monday hit $1,894.80 an ounce in early trading.

Jeremy Cook, chief economist at World First, said: 'Gold is a rocket ship at the moment and there are many factors that make us expect further gains.

'Firstly, the global recovery has juddered to a halt and, with the obvious uncertainty surrounding the situation, people have been looking to buy tangible assets.

Secondly, we are likely to see inflation remain high and with the prospects of further quantitative easing in the UK and US this will translate to an increased erosion of the value of money; something that gold investors tend to crow about.'

Gold prices have risen about 19 percent since the start of June, as Europe desperately tried to keep the downgrading of the US's credit rating from AAA from having a knock-on affect on European economies.

Citigroup commented in a gold update on Monday: 'When investors are hungry for gold, the metal has a habit of rising exponentially which has no parallel amongst metals.'

However, it moderated its stance by issuing the following statement: 'We expect those tensions and concerns to dissipate over time,' it said, 'and do not believe that (price-sensitive) jewellery demand will be able to make up for the loss of investment demand once sovereign financial tensions ease.'

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