Concerns over inflation and stability have boosted the price Gold prices climbed above US$500 per ounce for the first time in 18 years yesterday, and market experts predict the precious metal will retain its allure as a safe haven for investors despite its high price. Gold futures rose to a high of US$502.70 per ounce and the spot gold price to US$502.30 per ounce in Asian trade before retreating below the US$500 psychological barrier as speculators locked in gains. The metal has gained 10 per cent since early this month. In New York morning trade, gold for February delivery hit US$506.70 an ounce then fell to US$501.30. The highs were well short of the US$873 record set in 1980, but were the first time gold rose above US$500 since December 11, 1987. 'This is good news in Asian economies because more people there buy gold as a security, and they'll feel good knowing their investments are doing well,' said Ross Norman, a UK-based metals analyst with TheBullionDesk.com. Mr Norman said the next technical price hurdle, based on past trading patterns, would be $509.80 per ounce. Newmont Mining, the world's largest producer of the metal, expects the gold price to go above US$1,000 an ounce in the next five to seven years as Asian demand grows faster than supply. Asian demand for gold in the form of jewellery or coins remained strong despite the high price, Mr Norman said. India is the world's largest consumer of gold. Financial instruments based on physical gold, such as futures, have become more accessible to investors in Asia, stoking prices further as investors pile into the market. Gold is also becoming more attractive to central banks as a reserve asset, reversing the trend of recent years. 'It's the season to buy gold. The monsoons have been good, it's wedding season and Christmas is coming, so this is traditionally a time you see a lot of demand,' Mr Norman said. Global concerns over inflation and political stability have been boosting gold prices for months. Japanese investors have been particularly keen on buying gold. The climb in gold prices kicked into high gear in early November over global economic concerns, but by now the buying fever has taken on a life of its own, said Yingxi Yu, a precious metals analyst at Barclays Capital in London. 'This rally is not due only to specific macroeconomic reasons, but rather a strong technical trend has attracted investors,' Ms Yu said.