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Last Updated: Friday, 7 September 2007, 14:10 GMT 15:10 UK
Gold hits 16-month high of $700
Gold bars
Gold is seen as a safe haven against political uncertainty
Gold prices hit 16-month highs on Friday, as investors used the metal as a safe haven in an uncertain market.

Spot gold prices rose as high as $700 (345) an ounce in London for the first time since 17 May 2006.

Gold is often a popular destination for funds when other investments are seen as getting riskier.

Recent tensions in the Middle East have boosted the price of gold, just as they increased oil prices.

Other factors include the falling value of the US dollar, which is usually seen as an alternative safe investment.

Gold is now recovering from its falls in August, when some investors and institutions sold gold to plug the gap left by devalued debt.

The price has risen about 9% from its lowest point last month.

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