Billionaire investor Warren Buffett has decided to invest in gold, having long been against doing so.
Back in 1998 the world's third-richest man argued that the precious metal has "no utility" - "gold gets dug out of the ground in Africa or someplace, then we melt it down, dig another hole and pay people to stand around guarding it Anyone watching from Mars would be scratching their head".
However, he has now performed an about-turn and is acquiring gold jewelry manufacturers Bel-Oro International and Aurafin LLC, and consolidating them into the Richline Group.
The new company will account for around six per cent of the world's gold jewelry market, with other Buffett-owned retailers due to buy gold items from Bel-Oro and Aurafin. Richline will likely generate revenues of £250 million.
Meanwhile analysts are predicting that demand for jewelry and other gold items in China and India is likely to push up the price of gold in the coming months.
Huw McKay of Westpac Banking Corporation told Bloomberg the price could peak at more than $700 an ounce at the end of 2007.