Safety-first investors boost gold

GOLD powered to its highest for almost five years today as nervous investors continued to dump risky stocks and the US dollar in favour of the safe-haven yellow metal.

It shot up to $327.05 at the afternoon fix - its highest since October 1997 and $2 more than this morning's level. It has now gained 18% since the start of the year.

Traders said that its strength reflected safe-haven buying triggered by mounting tensions between India and Pakistan over Kashmir. Analyst John Reade at UBS Warburg said: 'With the dollar continuing to look weak, gold looks set to make further gains.'

Meanwhile, the euro reached fresh highs against sterling and the US dollar, boosted by renewed jitters about the strength of America's recovery and a pick-up in business confidence in Europe. The single currency hit a 14-month high of 63.81p and an eight-month best of 93.26 US cents as Wall Street posted further losses.