Gold futures hit a new record on Monday of nearly $1,034 an ounce before edging back down after the Federal Reserve cut the discount rate by a quarter of a percentage point after JP Morgan Chase & Co. agreed to buy the troubled investment bank, Bear Stearns.

Gold for April delivery stood lately at $1,009.40 in the Comex Division in the New York Mercantile Exchange, after hitting high of $1,033.90 an ounce. Bullion gained 3.4 percent.

The benchmark contract closed Friday's session at $999.50 an ounce on the New York Mercantile Exchange.

Also on Nymex, crude oil for April delivery fell $2.67 to $107.54 a barrel, after dropping 12 cents on Friday.

In a bid to prevent a further run down on major global financial firms, the Fed lowered the rate on direct loans to commercial banks by 25 basis points to 3.25 percent and offered to lend money to a longer list of firms than ever before.