It hasn't paid this much to invest in gold since 1979.
That year, fearful investors ditched stocks for so-called haven investments in droves as the Shah of Iran was deposed, the British government collapsed in a vote of confidence and the Soviet Union invaded Afghanistan, causing the price of gold to more than double.
But global market jitters have put gold on track for its biggest yearly gain in 32 years. The precious metal rallied to highs of US$1,894.80 per troy ounce, an increase since January of 34.1 per cent and the latest record high reached by the yellow metal, before retreating to $1,865.70.
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The most precious and valuable commodity.
Other precious metals have joined in the rally, with silver rising 39.57 per cent since January to $42.88 per troy ounce, and platinum also rising 8.59 per cent to $1,889.00 per troy ounce.
Fears over global growth and the possibility of further monetary stimulus from the US have propelled precious metals higher. The MSCI World Index of global stocks has lost 13.35 per cent this month, leaving investors scurrying in search of safe investments.
Much of the recent appreciation in precious metals could be attributed to speculation, said Neil Meader, the research director at Thomson Reuters GFMS.
"It's heavily influenced by investment," he said. "I've not heard of anything on the fundamental front that would justify changes to most of these metals." Gold is viewed by some investors as a haven that holds its value when stocks or currencies may be declining.
World markets began a week of fresh losses, with Asian stocks falling in the early hours of yesterday morning. The Nikkei 225 lost 1.04 per cent to 8,628.13, although European stocks have since rallied, blunting gold's gains.
Faltering global growth and the likelihood of a further bout of quantitative easing (QE) from the US Federal Reserve are among the factors driving the surging prices of precious metals, analysts from Morgan Stanley wrote in a research note.
"We believe weaker [developed market] growth and the enhanced risk of debt-induced deflation in the US and Europe has materially enhanced the appeal of gold and silver as safe haven assets and the potential for renewed QE will likely only further fuel investor demand by weakening the US currency," the note said.
Investors will hang on every word of a speech by Ben Bernanke, due to be given at the Fed's annual meeting on Friday at Jackson Hole, Wyoming. Last year, the speech was used to announce a second round of monetary stimulus, and expectations are high that there will be a repeat this year.
Unlike gold and silver, platinum was also rising as a result of fear of potential supply disruptions, Mr Meader said.
The price of the metal has risen following fears of supply disruption in South Africa, where miners have threatened industrial action.
"Because platinum is so dependent on South Africa, any wobbles there will immediately add something to the platinum price," Mr Meader said.
These worries come on the heels of a looming deadline by Robert Mugabe's government in neighbouring Zimbabwe to force local subsidiaries of mining companies, such as Rio Tinto, to grant a controlling stake to local owners.
