Gold's Largest Move in Four Years

Gold has broken above $US500 an ounce it is soaring. The spot gold price jumped more than $US7 an ounce, or 1.4 per cent, in New York to close at a new 24-year high of $US529.50.

Gold rallied 4.6 per cent last week, its biggest weekly gain in almost four years, on heavy buying from the Middle East and Asia, where investors have been mopping up the precious metal to diversify from the US dollar and US-dollar-denominated assets.

The World Gold Council said demand for coins, bars and bullion-backed shares jumped 56 per cent in the July- September period.

The gold price is rocketing, CommSec chief equities economist Craig James said, because the surge in demand is occurring as world production is falling.

World goldminers produced 342.7 metric tonnes last year, the lowest annual production since 1931 and 8.8 per cent less than in 2003, while the world's central banks have also reduced their gold sales. Some are now looking to boost their gold reserves. Russia recently said it wanted to double its gold holdings.

"We haven't been producing enough gold in recent years and demand is super strong," Mr James said.