Late trading in New York on February 21 saw the price of gold rocket $23.50 (£16.50) to $680.50 (£482.50) an ounce, its highest close since July 7 last year. The leap followed publication of the US Department of Labour’s Consumer Price Index (CPI) report showing inflation had risen faster than expected in January.

Brighton-based precious metals dealer Michael Bloomstein said other contributing factors included a lack of confidence in currencies and banks moving away from wanting payments in dollars and euros in favour of gold.

There has also been an increase in demand in China and India over the past 18 months. Rising political tensions with Iran, problems in Italy and Nigeria and tension between the United States and Russia have also contributed to the push in prices.

“People don’t necessarily buy gold to see big returns, but rather want to invest in something safe and stable – gold doesn’t crash,” said Mr Bloomstein.

But he warned: “It is getting very volatile and at the moment you can get your fingers burnt very easily.”