The rise in the gold price to record highs above $1,110 per ounce may give investors concerns that the yellow metal may be due for a sharp retracement if economic sentiment changes, but the longer term outlook for gold prices remains strong, according to Altus Asset Management, a UK firm.

“While its price may be volatile in the short term, we consider that the fundamentals for gold are robust and anticipate its real price will trend higher over the coming two years,” said Steven Poulton, manager of the Altus Resource Capital Fund, which is embarking on a second round of capital-raising. The fund holds shares of resources firms working in the metals industry.

The net asset value of the Guernsey-domiciled fund has risen by 21.2 per cent in the four months since it was listed on the London Stock Exchange.

Altus’ enthusiasm for gold investing is understandable at a time when gold prices have soared, propelled by a mixture of forces such as rising demand from increasingly affluent emerging market consumers, limited supplies, a weak dollar and fears about rising inflation.

Gold prices hit a record of more than $1,110 this month. Demand is strong: total identifiable gold demand for the third quarter of this year reached 800.3 tonnes, or $24.7 billion, up by 15 per cent from the second quarter, according to the World Gold Council’s latest figures released yesterday. The UK’s Royal Mint has sharply increased production of gold coins in the third quarter, according to Bloomberg.

Output rose to 32,735.8 ounces from 7,500.2 ounces a year before, the news service said, quoting Royal Mint data that it had obtained.

The Altus capital raising is being organised by Nimrod Capital, a business that was set up in the middle of last year. It focuses on marketing, distribution and advisory services for investment firms.