There is a gold rush on, and it is set to continue according to US bank Citigroup, the Telegraph has learned, because the damage from the global credit crisis was sparking unprecedented moves from central banks to inject liquidity.

This flow of cash will have one of two possible outcomes the bank said: a resurgence of inflation or a continued spiral into recession and consequential depression; but either way, gold prices will thrive in both scenarios.

Gold is trading at more than $812 this week, and commodities have rallied after the US Government announced a rescue package for Citigroup, urging investors to seek safe havens from ongoing market volatility.

The World Gold Council recently reported that demand for gold reached “an all time quarterly record” of $32bn in the third quarter of 2008 “as investors around the world sought refuge from the global financial meltdown.”

David Holmes, director of precious metals at investment bank Dresdner Kleinwort, told the Telegraph “There has been a significant shift into physical gold due to its safe-haven qualities.”

Investing in gold has become increasingly easy in recent years, with an increasing number of investors buying gold online.

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