Gold futures closed with gains Wednesday, as the U.S. dollar fell to a record low against the euro.
Gold for April delivery ended up $4.50 at $980.50 an ounce on the Comex division on the New York Mercantile Exchange. On March 5, the price reached $995.20, the highest ever for a most-active contract.
The dollar dropped on concern that the Federal Reserve's plan to loan banks $200 billion in exchange for debt, that includes mortgage-backed securities, would not succeed in easing the credit crunch.
Markets returned to 'worry' mode less than 24-hours after (the announcement), aid Jon Nadler, an analyst at Kitco Minerals & Metals Inc.
Meanwhile the greenback remains near historic lows against the euro, boosting gold's appeal as an alternative investment.
While the Dow and overseas equity markets enjoyed rallies, the greenback was back to 72.53 on the index and 1.5469 against the euro in a vote of 'no confidence' on the Fed's offer to accept mortgage-backed securities from and extend terms to troubled institutions.
The current reading indicates that dollar selling remains a relatively 'safe' activity for speculators,' he added. 'Buying gold, therefore, remains safe as well for the moment.