The spot gold price is 0.04% higher on the day at $1274 an ounce at 14:55 in London. (IG Index).
Gold prices hit a fresh record high, and trade within $20 of the $1300/oz mark this morning buoyed by investors concerns over the economic outlook.
Prices have since pulled back - in line with a strengthening dollar.
Simon Denham at spread betting firm Capital Spreads says Dollar weakness is a key driving factor behind the latest run.
"Elsewhere the dollar continues to suffer for the 4th day in a row, currently at 1.3150 against the Euro and 1.57 vs the Pound. This dollar weakness has added fuel to the fire in the Gold market, with the rally continuing un abated. The $1285 level has been reached, making $1300 very achievable in the near term."
Market speculation over QE-2 set against an environment of low interest rates (contributing to dollar weakness) as well as further plans of producer hedge book buy-backs have helped to propel gold prices to new highs.
"Even though jewellery demand has started to wane in light of record prices, we continue expect physical interest to materialise given the good monsoon season in India and expectations of higher prices," says Suki Cooper at Barclays Capital.
"Furthermore, we maintain our view for the fourth quarter of this year to be the strongest quarter on record yet for gold prices, with downside corrections finding support from the seasonally strong period for fabrication demand with the forthcoming wedding and festival season in key gold consuming countries," says Copper.
Investor interest remains strong with gold ETP holdings edging higher yesterday but inflows for the month so far are flat following the pick
up in interest in August.
Silver prices continue to piggy-back off gold, closing at a fresh 21?2 year high at $20.74/oz (1 cent off the high set in March 2008) and eyeing $21/oz this morning, while silver ETP holdings were unchanged at record levels of 13,212 tonnes (up 155 tonnes in September). Platinum prices retained their gains over $1600/oz and have climbed over $1620/oz this morning, following news that the National Union of Mineworkers in South Africa had rejected Northam Platinum’s latest wage offer (Reuters).
