Investors are increasingly seeing gold bullion as a safe haven, it has been reported, as they attempt to minimize their losses in the wake of the global turmoil in the financial markets.
According to the Times, money has flowed into Exchange Traded Funds (ETF) since the collapse of Lehman Brothers last month.
SPDR Gold Trust, for instance, which is the largest gold-backed ETF in the world, has enlarged its holdings by 26 per cent since mid-September.
Commenting on the trend, Nicholas Brooks, head of research and investment strategy at ETF Securities, told the newspaper: "The financial system is imploding and the real economy is starting to feel the impact, so investors are looking for somewhere safe to invest."
This sentiment has been backed up by Dresdner Kleinwort analyst Peter Fertig, who expressed his belief that investors see buying gold as "the only lifeboat in the stormy sea".
On Friday, SPDR Gold Trust said its holdings had risen to a new high of 770.64 tons.
ETFs allow investors to buy into gold without owning the metal itself.
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