Gold price hits record at $1,600 on debt uncertainty

July 19 -- The price of gold jumped above $1,600 (£1,000) an ounce for the first time as debt worries in the US and Europe continued to trouble investors.

The precious metal rose $12.30 to settle at $1,602 an ounce in London trading.

Monday capped a record breaking rally for the gold price whilst global share markets tumbled.

Gold is considered a safe investment and usually gains at times of global economic uncertainty.

"Gold hit another milestone... at $1,600 as investors lose confidence in the ability of politicians to get a grip with the debt problems weighing down on sentiment," said Michael Hewson from CMC Markets, a trading group.

"More advances look likely," he said.

The record breaking price comes ahead of Thursday's summit of eurozone leaders in Brussels where they will once again try to contain the growing debt crisis.

Investors are concerned that Greece may default on its debt, and countries such as Italy and Spain, who are also struggling with high debt levels, will get pulled into the crisis.

Meanwhile in the US politicians are struggling to reach an agreement on a deficit reduction plan in time to avoid a debt default before the deadline of 2 August.