The gold and silver price surged to a three week high on Friday on the news the Chinese Central Bank is to cut interest rates.

The rate cut is the first since 2012 and comes at a time when the Chinese economy is slowing. By lowering the cost of borrowing Central Banks hope lending will increase and in turn stimulate the economy. The rate cut follows recent decisions by the ECB and the Bank of Japan to deploy new stimulus measures in an attempt to boost a slowing world economy.

Gold is often bought as a hedge against inflation and a slowing economy. The demand for gold bars, coins and jewellery has picked up since gold fell to a four year low on the 7th of November as investors rushed to take advantage of lower prices.

Holdings at the world’s largest gold backed exchange traded funds fell 2.1% to 1,641.7 tonnes, it’s the lowest level in over 5 years.

Gold is currently trading at £764.95 per ounce, silver £10.45 per ounce, platinum £780.34 per ounce and palladium £504.72 per ounce.