Gold continued its bull run for the third day yesterday reaching its highest ever price of $1093.65 an ounce before sliding down to $1091.93, adversely impacting jewellery sales in Dubai.

As investors were blamed for having driven up the gold prices, those involved in retail sale said high gold prices will hit their business.

"Retail jewellery sales are already down by about 40 per cent. The resurgent rally in gold price may further dampen our sales by another 20 per cent from the current levels," said Sanjay Jain of Al Mowaiji Jewellers company.

Those dealing in silver jewellery reported a slight beefing up of demand.

"We have seen a rise in demand as winter is approaching," said Jaisal from Karachi jewellers.

The bullion has been rising ever since the International Monetary Fund (IMF) announced that it is selling 200 tonnes of gold to Indian central bank . The bullions price has risen by $50 gaining almost 3.3 per cent in a span of two days.

Gold market insiders said that there is just one direction for gold for a visible future now –"up". The rise in gold prices came yesterday setting aside the traditional inverse correlation of gold with the US dollar. The Greenback strengthened yesterday and traded at $ 1.4750 against the Euro.

"This rally in gold prices indicates a global diversification away from the US dollar. The Indian central banks action indicates a growing tendency among the central banks to diversify," said Binod Shankar, a Dubai- based financial analyst.

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