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Uncertain economy gives gold a lift

Economic uncertainty is likely to see alternative investment prosper, as the lack of profitability in traditional stocks makes people turn to new areas – with precious metals set to prosper.

Hargreaves Lansdown senior analyst Alex Davies is among those predicting that the recent record highs posted by gold – which broke through the $1,000 per ounce mark – could continue.

Despite the historical high of the yellow metal, matched by similar highs for platinum and silver, Mr Davies is confident that the economic backdrop makes price rises likely to continue.

"I think potentially there is still a fair bit of growth to go, bearing in mind that the reason people buy gold is really to hedge against inflation or hedge against the falling dollar or the falling stock markets, and all three of those things are going on right now," he said.

"When the price is adjusted in real terms with inflation, the highest price of gold has been over £2,000 in real terms, so it's not reached its peak, it's not even half way there yet. On those grounds there could be further to go. The case still remains strong."

Hargreaves Lansdown has more than 350,000 active clients and boasts more than £8 billion in assets under administration on behalf of its investors.

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