UK - James Burton, the former chief executive of CalPERS who now runs the World Gold Council, has hailed the first day of dealing in a new gold stock aimed at institutional and retail investors.

"We are proud to have achieved our aim of bringing an investment product to market which will allow both institutional and retail investors to invest in gold bullion easily for the first time," said Burton, chief executive of the World Gold Council trade body.

Gold Bullion Securities began trading on the London Stock Exchange today. They are gold-backed securities that enable investors to trade an interest in gold bullion on the London Stock Exchange. Each security represents a beneficial interest in one-tenth of a fine troy ounce of gold bullion.

The launch comes with gold at seven-year highs. Last month Merrill Lynch Investment Managers said pension funds should have at least five percent invested in gold funds if they want to take advantage of increasing demand for the metal.

Katie Pybus, strategy analyst at Henderson Global Investors says a rise in terrorist activity has made investors more risk averse - but dollar weakness is also playing a part in the rising gold price. “As with most commodities priced in dollar terms the rise is much less impressive when viewed in
euro terms for example,” she says.

"Today represents a landmark in the history of the world's oldest investment," Burton said. "Gold has represented an important currency for thousands of years and a major store of value for governments, institutions and individuals alike.

"The listing of Gold Bullion Securities will further develop gold's historical role and is another ground-breaking step in its evolution."

Burton left the California Public Employees Retirement System, the largest public pension fund in the US, in August 2002 to head the gold marketing body.

The UK listing follows a similar listing on the Australian Stock Exchange earlier this year. The gold backing the securities will be held by the custodian bank, HSBC Bank USA, or its sub-custodians. There will be a management fee of 0.30% per annum.

"Since announcing the launch of the Gold Bullion Securities' prospectus only last week, we have had very positive feedback and support from both the private and institutional investment community," said Simon Village, joint managing director of Gold Bullion Securities Ltd.

"We are looking forward to a gradual build up of trust assets as people get to know this revolutionary new investment product."