And leading African gold firm, AngloGold - the world's second largest producer of gold - has said it expects prices to rise still further this year.

Gold was trading at $370.25 an ounce just before lunchtime in London, hovering close to this month's six-year high of $372.60.

Gold prices have risen 25% in 2002 and are up 7% this year on concerns about the economic consequences of a military campaign in Iraq.

Gold will always have a historical intrinsic value. If the world goes into global meltdown people will trade as they did many hundreds of years ago Thebulliondesk.com analyst James Moore

Investors have been buying gold largely because the main alternative, the US dollar, remains weak and global stock markets have been in the doldrums for quite some time now.

On Thursday, the Dow Jones lost 2% of its value while European markets opened sharply lower on Friday.

Safe haven

"Gold will always have a historical intrinsic value. If the world goes into global meltdown people will trade as they did many hundreds of years ago," Thebulliondesk.com analyst James Moore said.

After years at the margins of the modern financial system, gold has made a strong comeback as a safe investment in times of international tension.

"People have moved back to it because of its traditional, safe-haven value. We have seen an influx of ordinary people and bigger investors who have been absent from the market for about 10-15 years," Mr Moore said.

South Africa's AngloGold was also convinced that gold would fare well with investors this year.

The company forecast a higher gold price in the year ahead.

"All of the factors that have been positive for gold in 2002 remain firmly in play and there is good reason to expect higher gold prices in the year ahead," AngloGold Marketing Director Kelvin Williams said in a statement.

Falling gold production and volatile stock markets are likely to support gold prices in the longer term, AngloGold chief executive Bobby Godsell told the BBC Radio's World Business Report.

Crisis talks

The coming week could be crucial in the ongoing stand-off with Iraq.

On Friday, British Prime Minister Tony Blair arrived in Washington for crisis talks with US president George W. Bush.

On 5 February, US Secretary of State Colin Powell is to present "information and intelligence" to the UN Security Council about Iraq's alleged weapons of mass destruction.