LONDON, England - June 8, 2010 - The price of gold rose to an all-time high point above $1,250 an ounce on Tuesday, as investors nervous about the weak state of the global economy sought safety in the precious metal.

At about 09.25 GMT on the London Bullion Market, gold hit a record $1,251.85 an ounce.

"Gold rallied to a new all-time high this morning as worried investors continue to pile in to the precious metal," said Rajesh Patel, head trader at financial betting firm Spread Co.

"We are seeing continued signs of stress in the financial markets and investors, novice to expert, are looking at gold now as a hedge against further turmoil." Gold is viewed as a safe-haven investment in times of economic trouble.

U.S. gold futures for August delivery hit a record high $1,254.50, and were later up $10 at $1,250.80. The precious metal also hit record highs in euro, sterling and Swiss franc terms.

Investors' concern that loose monetary policy will unleash inflation is among the factors prompting interest in tangible assets such as gold.

Jeremy Charlesworth, manager of the Moonraker Commodities fund, said, "If you mass produce something then it will lose value at some stage. Quantitative easing is undermining the value of western currencies and assets.

"Yet the European Union has decided that the solution to the debt crisis is even more debt and confidence in the recovery package has now evaporated. When people abandon bonds and western currencies they will look for real assets, which can't be created at the touch of a button. The gold market really does have the bit between its teeth at the moment."