Resource analysts are predicting the global price of gold will break the $1,700 per ounce barrier over the next few months and could reach $1,750 by the end of 2011.

London-based Sharq Al-Awsat newspaper cites a range of reasons given by experts, including the dollar's weakness due to US debt, unstable finance markets in Europe and high demand for the precious metal in India and China.

Central banks are also thought to be hedging against the weak dollar and fear of the future of US Treasury bonds by increasing their share of gold. 

Increased costs of gold mining are also being passed on to buyers.