Gold prices have ended the session lower, having earlier soared more than 4 per cent.

As investors scrambled for safe havens amid the latest shares meltdown, the precious metal jumped $38.5 to $925 (£545) an ounce on commodity markets.

However, gold ended the day below $830 an ounce, shedding 6 per cent as dollar gains triggered profit-taking.

Paul Mumford, senior fund manager at Cavendish Asset Management, said clients have been switching cash from shares and even clearing out bank accounts as they scour the market place for supposedly safer investments.

He said: "People at the moment are being a bit cautious about leaving their money in a bank and having it in shares, and fleeing into something they feel is a much safer area to be.

"The problem with gold is it's a volatile commodity. It's all very well when the demand is there, but you stand to lose or make much more in the gold market."

Mr Mumford added that a lot of money is being put into short-dated Government bonds, or gilts, which have a ready market and mature within a matter of months. Investors are guaranteed a rate of interest as well as their capital being repaid at the end of the term.