Investors dash for gold as markets tumble on Russia sanctions and Argentina default

Investors searching for a safe haven piled into gold funds as stock markets in the UK and US were spooked by economic sanctions on Russia and Argentina defaulting on its debt.

Last week investors put $106m (£63m) into exchange traded funds that are backed by gold, the latest data from ETF Securities reveals.

Exchange traded funds are seen as a low cost way into the yellow metal by offering investors a share in a fund that is backed by purchasing physical gold.

The investment came as the US increased economic sanctions on Russia in light of the Malaysian Airlines MH17 crash in Ukraine, and Standard and Poor's the rating agency declared Argentina had defaulted on payments on $13bn of its government bonds.

Investors put money into the yellow metal despite the gold price falling 0.6pc last week.

The markets in the US and UK have recovered some of their losses from last week.

^{The FTSE 100 has recovered from sharp losses last week. Source: Bloomberg}

The yellow metal is up 6pc since the beginning of the year at around $1,290 (£785) but still a long way off the historic high above $1,900 that was achieved in in 2011. Gold endured its biggest price collapse in 30 years in 2013 as investors shifted assets out of exchange traded funds and into higher yielding equities.

^{Gold has risen in 2014 but remains well below its all-time high. Graph: Bloomberg}