By Pratima Desai LONDON, Sept 16 (Reuters) - Gold came within touchingdistance of a record high on Thursday as the softer dollar anduncertainty about economic and financial stability persuadedinvestors to seek a safe place to park their assets. Strong investment demand also pushed spot silver to $20.65an ounce, its highest since March 2008, traders said. Spot gold was bid at $1,270.95 a troy ounce at 0952 GMTcompared with $1,265.65 an ounce at the close on Wednesday. Ittouched an all-time high of $1,274.75 on Tuesday and many expectto see the $1,300 level very soon. One potential trigger could be the conclusion of a meetingof the U.S. Federal Reserve on Sept. 21, when the central bankcould announce further quantitative easing to stave off economicslowdown in the world's largest economy. "If the Fed says next week it is going to do morequantitative easing...the inflation bugs will have a field day,"said David Thurtell, analyst at Citi, who thinks gold could seethe $1,300 level next week. Quantitative easing is normally a process by which centralbanks attempt to pump money into the economy by buying bonds.Excess liquidity could lead to too much money chasing too fewgoods or services -- resulting in price pressures. Also on the agenda is the U.S. fiscal outlook with the startof the new financial year in the United States. "People will worry as politicians commit to new spending,especially with mid-term elections approaching," Thurtell said. Gold market sentiment was helped by the euro, which rosebroadly on Thursday, hitting one-month highs versus the dollarand the yen, after a Spanish bond auction produced lower averageyields than previously. "There's still no real confidence in the U.S. recovery. Noone sees any real reason for gold prices to decrease," saidGwenael Chazal, head of Metal Trading. NO GUARANTEES Before the Fed's meeting next week triggers for upwardmomentum could include the U.S. producer prices for August --due later on Thursday at 1230 GMT. U.S. consumer prices for August due on Friday could alsospark a rally, which could take gold to $1,300 an ounce. "The CPI data may give us more clues on the possibility ofthe Fed expanding its QE programme," said Andrey Kryuchenkov,analyst at VTB Capital. "There is no guarantee that it will happen with macro datamore or less in line with consensus lately and some positivesurprises ... It was investment demand that pushed gold up andinvestment demand will push it to $1,300." Investor interest can be seen in the world's largestgold-backed exchange-traded fund, the SPDR Gold Trust, whichsaid its holdings fell to 1,294.746 tonnes by Sept. 15 from1,298.698 tonnes on Sept. 14. But the fall follows a six-tonne rise the previous day. Positive macro data is also partly behind the run higher inindustrial precious metals such as silver, platinum andpalladium. Spot silver was bid at $20.60 an ounce from $20.49late on Wednesday. "Hopes for strong economic recovery are why silver isexperiencing a similar rush to that seen in platinum andpalladium earlier this year," Kryuchenkov said. Spot platinum was bid at $1,600.50 an ounce from $1,604.50at the close on Wednesday when it touched a four-month high of$1,619.50. Palladium was at $550.50 at $553.78. (Reporting by Pratima Desai; editing by Sue Thomas)

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