Expectations of more US stimulus money boosted the metal as a perceived US dollar and inflation hedge.
The most-actively traded gold contract, for December delivery, rose $US2, or 0.2 per cent, to settle at $US1310.30 a troy ounce on the Comex division of the New York Mercantile Exchange, marking the metal’s 10th record settlement in the last 12 sessions.
The contract hit a record intraday high of $US1314.80 in electronic activity in Europe.
“Investor demand has been great,” said Stephen Platt, analyst with Archer Financial Services in Chicago. “People are still very nervous in relation to potential quantitative-easing actions leading to inflation.”
KEY COMMODITY PRICES: copper, oil, gold, silver, livestock and wheat
Expectations have ratcheted up that the Federal Reserve will further ease monetary policy.
This so-called quantitative easing is expected to include the purchase of Treasuries, which would pressure the US dollar and boost gold as a hedge against the potential devaluation of the greenback.
Some believe such measures, and similar ones from other nations, will eventually lead to inflation, benefiting gold as a hedge against rising consumer prices down the road.
“With governments such as Japan, the US, Switzerland, the UK, Brazil, (South) Korea, Taiwan, China and many others internationally devaluing their currencies, there is a growing risk of inflation and indeed stagflation,” according to a note from Dublin-based bullion dealer GoldCore.
The weakening US dollar has also been supporting the US dollar-denominated metal by increasing demand from buyers using other currencies.
Ultra-low interest rates have been another leg of support for gold by reducing the opportunity costs of holding the metal, which pays no interest itself.
Meantime, fears about euro-zone sovereign-debt issues have also been boosting gold as a so-called safe-haven investment, as have wider worries about the slow pace of the US and worldwide economic recovery.
Jitters came this week as Moody’s Investors Service downgraded the debt of Anglo Irish Bank, and a weekly German newspaper reported European Commission officials were worried about the health of several regional banks there.
Gold is considered a safer bet than some other commodities and equities in times of financial uncertainty because the precious metal isn’t as linked to industrial cycles as those other investments are.
Other precious metals traded in New York also gained, with December silver rising 1.1 per cent, January platinum adding 1 per cent and December palladium adding 1.2 per cent.
