LONDON – Gold scored a record high above $1,275/oz on Thursday, as currency market jitters and broader economic uncertainty enticed more investors toward the metal's safe-haven credentials.
Strong investment demand also pushed spot silver, often seen as a cheap proxy for gold, to $20.75 an ounce -- its highest since March 2008.
Spot gold was bid at $1,273.50 a troy ounce at 13:15 GMT compared with $1,265.65 an ounce at the close on Wednesday.
Earlier on Thursday it hit a record $1,277.70 an ounce. US December gold futures also rose to a historic high.
The dollar eased against a basket of major currencies, bolstering the case for bullion, with currency markets struggling to settle after Japan's huge intervention to weaken the yen a day earlier. World stocks slipped.
"It's an insurance policy at the end of the day," said Robin Bhar, analyst at Credit Agricole. "All the ingredients are still there -- all the uncertainty and fear -- to keep gold underpinned."
Analysts and traders are looking to $1 300 an ounce as a major psychological marker, with $1 350 seen as the next potential target.
"Gold rising to $1,300/oz looks increasingly likely and we are only 2% below that level now. Once $1,300/oz is breached, gold could experience a pullback and consolidation," Goldcore said in a note to clients.
QE11 EYED
One potential trigger for further gains could be the conclusion of a meeting of the US Federal Reserve on September 21, when the central bank could announce further quantitative easing to stave off economic slowdown in the world's largest economy.
"If the Fed says next week it is going to do more quantitative easing...the inflation bugs will have a field day," said David Thurtell, analyst at Citi, who thinks gold could see the $1,300 level next week.
Quantitative easing is normally a process by which central banks attempt to pump money into the economy by buying bonds. Excess liquidity could lead to too much money chasing too few goods or services -- resulting in price pressures.
Also on the agenda is the US fiscal outlook with the start of the new financial year in the United States.
INVESTMENT
Investor interest can be seen in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, which said its holdings fell to 1,294.746 tonnes by September 15 from 1,298.698 tonnes on September 14.
But the fall follows a six-tonne rise the previous day.
Positive macro data is also partly behind the run higher in industrial precious metals such as silver, platinum and palladium. Spot silver was bid at $20.74 an ounce from $20.49 late on Wednesday.
Spot platinum was bid at $1,602.50 an ounce from $1,604.50 late on Wednesday in New York when it touched a four-month high of $1,619.50. Palladium was little changed at $553.00 at $553.78.
On the mining front, South Africa's National Union of Mineworkers (NUM) said on Thursday that workers at Northam Platinum had rejected the company's 8.5 percent revised wage offer and will continue with their strike action.
