By Arpan Mukherjee Of DOW JONES NEWSWIRES WELLINGTON (Dow Jones)--Precious metals traded mostly higher in Asia Monday, with spot gold touching a new record--just shy of the psychological $1,600-a-troy-ounce mark--early in the session. Gold has made sharp gains since July 4 on the back of continuing euro-zone and U.S. debt worries, as investment demand was spurred by the safe-haven appeal of the yellow metal. The U.S. Federal Reserve's hint that another round of monetary stimulus might be in the cards also pushed gold higher last week, and the metal remained in record territory despite Fed Chairman Ben Bernanke clarifying later in the week that there are no immediate plans for further bond buying after the second round of so-called quantitative easing ended last month. The previous two rounds of quantitative easing in the U.S. had helped push gold prices significantly higher. Spot gold hit $1,598.59/oz in the morning before a stronger dollar capped its upside. At 0527 GMT, spot gold was at $1.597.40/oz, up $3.30 from its previous close. "With real interest rates remaining low and the consensus outlook for the U.S. currency looking bleak in the coming quarters, we believe there is little to prevent gold prices from touching fresh record highs in the coming weeks," Morgan Stanley said in a report. A preliminary reading of the Reuters/University of Michigan index of consumer sentiment showed a sharper-than-expected fall on the index to 63.8 from 71.5 a month earlier. Gold, which is considered as a store of value, is supported by weak economic data and uncertain economic conditions. However, gold's upside remained capped due to a stronger dollar against the euro. Dollar-denominated commodities are more expensive for holders of other currencies when the greenback gains value. The euro, which was at $1.4150 late Friday in New York, is was at 1.4075 around 0527 GMT. Traders said silver will likely break through $40/oz later in the day as buying continues in European and U.S. trading hours. "Precious metals are looking really good at the moment," a Singapore-based trader said. Spot silver was at $39.86/oz, up 59 cents from its previous close. Meanwhile, BNP Paribas cut its platinum and palladium price forecasts, citing poor market fundamentals. It revised its 2011 average price forecast for platinum to $1,815/oz from $1,845/oz and its 2012 forecast to $1,965/oz from $2,050/oz. It cut its average 2011 price outlook for palladium cut to $810/oz from $835/oz and its 2012 forecast to $960/oz from $990/oz. Platinum was at $1,757/oz, down $4 and palladium was at $783/oz, up $2. -By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com

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