Tension in the East and distrust in the West have combined to force up gold prices.The steady increase in the value of gold over the past two weeks is due to “a combination of factors,” according to jeweller and precious metals dealer Michael Bloomstein.

“Tension in the Middle-East and between India and Pakistan has fueled demand for tangible, portable assets,” Mr Bloomstein told the Antiques Trade Gazette. “At the same time, continuing market jitters over US corporate accounting practices have depressed equity markets and the value of the dollar.”

It has been reported that the Middle-East is reducing dollar holdings in exchange for gold, while strong demand also exists in the Far East.

But Mr Bloomstein added that there were other, less dramatic factors to consider: “Earlier forward sales are now due to be honoured, adding to the current demand for physical metal, and low interest rates have given an added incentive to holding gold.”