Gold price: ETF holdings jump to near 5-year high

On Tuesday, gold climbed back towards the $1,340 an ounce level bringing gains since mid-December to nearly $100 an ounce or 8%.

Large-scale speculators have been increasing their exposure to gold on derivatives markets doubling net long positions - bets that gold will be more expensive in future - in the space of three weeks to the equivalent of 20m ounces.

Retail and institutional investment in gold-backed exchange traded funds (ETFs) also continues to grow.

According to data compiled by Bloomberg ETF vaults now hold around 2,250 tonnes, the most since May 2013, as investors piled in ahead of a US government shutdown.

Ole Hansen, chief commodity strategist at Saxo Bank noted that "price corrections have so far been shallow":

"Gold continues to attract demand from investors seeking protection from rising inflation and the risk of a stock and especially bond market weakness.

"Geopolitics may receive some attention this week with Trump and many other world leaders meeting in Davos."