London

WESTERN investors and speculators have boosted gold prices to 12-month highs of over US$1,700 an ounce. The jewellery trade in India, China and Japan, however, has slumped.

Illustrating the extent of investment and speculation, the net assets of gold-backed exchange traded funds (ETFs) soared by 298 tonnes in the first quarter of the year to a record 3,185 tonnes worth US$176 billion at current prices.