Gold price at alltime high over trade war fears

The price of gold has hit a record high in pounds as investors express concern about escalating political instability.

The value of the traditional safehaven asset has surged on the back of the weak pound, the trade war between China and America and low interest rates, according to the Royal Mint.

An ounce of gold cost £1,239 on Wednesday afternoon, breaking the record set in 2011 in the wake of the financial crisis.

The price has risen consistently over the past few months, breaking its six-year highs multiple times throughout June, July and August.

Persistent concerns around the trade war between America and China, with neither side willing to back down, has pushed people out of mainstream investments and savings. Brexit uncertainty is also thought to be driving money into gold.

The potential for a central bank policy mistake is another key driver for professional investors, according to a study by Bank of America Merrill Lynch. Last month the Federal Reserve, the American central bank, cut interest rates when many thought it would raise them. This boosted the gold price as investors reacted to falling interest on their cash.

Gold has divided the investment world for centuries. Advocates say it spreads risk, while others argue it has no intrinsic value.

The most common way to buy gold is through an exchange-traded fund or ETF. The Invesco Physical Gold ETF is often recommended by financial advisers. The £842m BlackRock Gold & General is perhaps the best-known “open ended” gold fund. You can also buy gold through websites such as BullionVault or coins and bars through outlets including the Royal Mint.