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The fix of £601.79 on December 29 was a record in sterling terms and meant gold had risen 36 per cent during 2008. By way of comparison, the FTSE share index was down 33 per cent on the year.

Gold is traditionally used as a hedge against currency trading and a safe-haven at a time of falling stock and property markets.

The high price of gold primarily reflects the weakness of sterling, which fell substantially against both the US dollar and the Euro in 2008.

The price of gold in dollar terms rose by only three per cent over the year.