Gold hit a fresh record high on Thursday as the dollar struggled, while emerging market stocks climbed to their highest level this year.

European shares opened more than 1 percent higher ahead of interest rate decisions from the Bank of England and European Central Bank.

Neither was expected to change rates.

Market sentiment was also given a boost after aluminum giant Alcoa posted a surprise profit on Wednesday after three consecutive quarterly losses.

The company is the first major report in the U.S. third-quarter earnings season.

Spot gold topped $1,058 per ounce to mark a record high for the third session in a row. It has primarily been driven higher by the weakening dollar, which makes the dollar-denominated metal more attractive to investors.

In some currencies -- the high-flying Australian dollar, for example -- gold has actually fallen in price this year.

Investors are turning toward gold as a hedge in dollar weakness, said Adrian Koh, an analyst at Phillip Futures in Singapore.

The dollar was down 0.7 percent against a basket of major currencies <.DXY=>, close to its year lows.

The currency has been hit by a combination of expectations that U.S. interest rates will stay low for some time and a belief that the global economy is on the mend, easing the motivation behind last year's flight to dollar safety.

The euro was up 0.6 percent at $1.4773 and the dollar lost a third of a percent to 88.32 yen.

The Australian dollar gained 1.4 percent, still benefiting from this week's rate hike. It has now gained nearly 28 percent against the U.S. dollar this year.

STOCKS BUOYANT

World stocks were putting in another positive performance, with MSCI's all-country world index <.MIWD00000PUS> up 0.8 percent on the day. Its emerging market counterpart <.MSCIEF> was up the same amount at a new high for the year.

The two indexes have gained around 27 percent and 65 percent, respectively, this year.

The pan-European FTSEurofirst 300 <.FTEU3> was up 1.1 percent, boosted in part by commodity related stocks and bullish sentiment over the Alcoa earnings.

Alcoa had better than anticipated results, which is good. It is now all about anticipating quarter-three earnings. There is a general sense that quarter-three earnings are going to be more positive than expectations, said Bernard McAlinden, market strategist at NCB Stockbrokers.

Earlier, Japan's Nikkei <.N225> closed up 0.3 percent.

Demand for short-dated euro zone debt slipped with the Schatz yield at 1.27 percent.

(Additional reporting by Joanne Frearson, editing by Mike Peacock)

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