The price for gold in Asia briefly rose above $500 an ounce, as investors around the world grow nervous about inflation.
The price for gold had not crossed above $500 an ounce since December 1987. It briefly crossed that level Tuesday in Asia trading, and then ended the day in Hong Kong at $497.50.
Gold last regularly traded above $500 in 1982 - it had peaked in 1980 at about $870 an ounce. After that, it slumped sharply and in 2001 traded as low as $250 an ounce.
Connie Bolland, chief economist of an independent economic research and analysis firm in Hong Kong, says the price rise is partly seasonal. Jewelers in the region typically buy more gold in the second half of the year to stock up for the wedding season in India and for Christmas and New Year celebrations elsewhere.
But more importantly, investors are increasingly buying gold as a shelter against possible financial troubles. With oil prices staying high and the possibility of renewed inflation in many countries, many investors want to buy gold, which generally rises in value when there is inflation.
"It is partly because people are hedging against a couple of things - like the uncertainties in the world, inflationary worries and currency hedge when there is no particular leader apart from the U.S. dollar - so it's kind of an inflation and currency hedge really," she explained.
Ms. Bolland says buying gold as an alternative investment to diversify away from stocks, bonds and currencies has become more popular in Asia.
Some analysts say the current strength of gold has been partly caused by Japanese investors, who have bought it at record levels. Ms. Bolland says this has been triggered by the recent weakness of the yen and the poor performance of Japanese government bonds.
"It is also because Japanese are getting a bit more confident and they are looking for higher returns than just putting money into the JGBs [Japanese government bonds)]," she said.
Ms. Bolland says people in India and China also prefer to buy physical gold - traditionally gold jewelry or ornaments have been kept as investments that can be carried away in times of trouble and sold.
She thinks gold prices are likely to continue in the future, in part because of persistently high oil prices, the possibility of more inflation and concerns about the dollar's strength.