LONDON, May 29: Gold soared to its highest level in nearly five years on Wednesday as investors scrambled into the ultimate safe haven asset to protect themselves from a possible India-Pakistan war and a slumping dollar.

Gold was set or “fixed” in London at $327.05 a troy ounce, its highest fixing level since October 16, 1997.

The “fix” is a price set by market makers with the London Bullion Market Association in a wood-panelled room at merchant banker and bullion house N.M. Rothschilds. It tracks movements in the 24-hours a day spot market.

Gold’s advance crowned a 17 per cent rally in the bullion price since the start of this year which has sent global equity stocks from Canada to South Africa soaring to new highs.

Spot gold closed in London at $324.50/325.00 an ounce, up from Tuesday’s New York close of $324.10/324.60.

The rally has been mainly fired by gold’s safe haven status, amid violence in the Middle East, fears of a repeat terror attack on the United States mainland and the crisis on the India-Pakistan border.

“With the dollar continuing to look weak, gold looks set to make further gains,” said John Reade, analyst at UBS Warburg.

The dollar sank to its lowest level against the euro in more than eight months on Wednesday as the prospect of further losses on Wall Street heightened concern over the relative appeal of US assets.—Reuters