Britain accumulated so much gold in its Imperial heyday that the floor of the Bank of England vault is said to have collapsed beneath the weight. More than a century later, the boom in oil and mineral prices has led to another bout of state-driven gold-buying.

This time, however, the beneficiaries of the oil-price explosion are driving the demand for gold. Research by the World Gold Council shows that Qatar, the gas-rich Gulf state, has been buying about one tonne of gold - worth more than $34million today - every month for at least the past year.

Russia, a large producer of oil, gas and metals, has also been hoarding gold. It increased its reserves by 44 tonnes last year, spending more than $1.5billion, and holds 438 tonnes of gold compared with the 310 tonnes held by the Bank of England.

Demand from these countries is one of the reasons that gold prices have risen by 240 per cent since 2001. Gold hit a record high yesterday at $976.20 an ounce and analysts believe that it will pass $1,000 this year.

Most European central banks are selling their gold reserves and the International Monetary Fund (IMF) indicated this week that it, too, may start to sell gold. Countries such as Russia and Qatar want gold because they are generating huge surpluses from exports of natural resources but do not want to hold them all in US dollars, because the dollar's value is sliding.

Neal Meader, a research director at the Gold Fields Mineral Service, said: “Buying gold is like buying a hedge against risk and possible downsides elsewhere in the global economy.”

Another reason for the rise in gold prices is that Chinese citizens are buying gold jewellery as a store of wealth. It is a standing joke in the industry that the metal's price always rises after a good harvest in India or China, where farmers buy high-carat jewellery as a way of storing extra revenue. The Chinese central bank is not believed to have increased its 600 tonnes of gold reserves.

Matthew Turner, an analyst at the consultancy Virtual Metals, said: “We don't think the Chinese are buying because they have such huge foreign reserves that they would have to buy a vast quantity of gold to diversify it away from dollars.”

Western pension funds and institutional investors have also helped to drive up the gold price. Gold is traded on closed exchanges, such as the London Bullion Market, but for the past year investors have also been able to buy “shares” in gold. Exchange Traded Funds (ETFs) are quoted on regular stock markets and allow pension funds effectively to buy a share in a gold bar.

Ross Norman, of thebulliondesk.com, a metals news service, said: “The metal price really took off when the pension funds got involved. They have had a phenomenal impact on the gold market.”

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