What is driving gold prices up?

Gold prices continued their upward march on Thursday, hitting a four-month high in New York. Investors are piling into gold as a hedge against inflation because of expectations that China, the US will take steps to boost their economy.

In New York, gold for December delivery rose $32.30, or 2 per cent, on Thursday to end at $1,672.80 per ounce, its highest level since April.

A survey showed that China's manufacturing production fell to a nine-month low in August. There are also expectations that the Federal Reserve will take more steps to help the US economy.

Back home, gold prices scaled new highs, spurred by gains in the overseas markets.

Gold prices touched Rs 31,115 per 10 grams in New Delhi. Gold had crossed Rs 31,000 mark on Wednesday.