Gold scaled a record high at $1,173.50 an ounce on Monday as a weaker dollar boosted buying in gold as a hedge against depreciation of paper currencies.
Expectations of prolonged low U.S. interest rates also supported bullion's investment demand.
The precious metal has rallied to a series of record highs since news that India bought 200 tons of gold from the IMF broke in early November. Since then a number of other central banks have announced they are buying gold as well.
Gold has a lot of momentum. It is trading off the back of the dollar, and at the moment it seems to be outperforming that trade, as are a lot of other commodities, said Daniel Major, an analyst at RBS Global Banking & Markets.
The main supportive factor outside of the dollar has been various actions by central banks -- obviously the buying by India, and since then there has been Russia, and Mauritius, said Major.
Market sentiment was highly supportive after news that star hedge fund manager John Paulson said last week he was launching a new gold fund. Paulson is among a number of hedge fund managers stocking up on the metal.
Spot gold was at $1,164.20 an ounce at 2:08 p.m. EST (1908 GMT), against $1,148.20 late in New York on Friday. Earlier in the session, it hit an all-time high $1,173.50.
Year to date, the metal has risen nearly 33 percent.
U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange settled up $17.90, or 1.6 percent, at $1,164.70 an ounce.
The dollar fell broadly on Monday, sliding nearly 1 percent against a basket of six other currencies, after a Federal Reserve official affirmed expectations that U.S. interest rates will stay low for an extended period.
Weakness in the U.S. unit boosts gold's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Oil initially rose more than 2 percent to above $79 a barrel. However, oil turned lower in late the session.
Strong oil prices raise the metal's appeal as an inflation hedge. For a graphic on gold, oil and dollar's performance, click on:
Investors have been buying gold not only to protect portfolios against a falling U.S. dollar but also against all fiat currencies, analysts said.
Gold priced in currencies other than the dollar were also reaching historic highs on Monday, with gold priced in euros rising to a nine-month peak of 782.76 euros an ounce, within 15 euros of a record high.
Sterling-priced gold reached a record high of 705.34 pounds an ounce, while gold denominated in Japanese yen rose to a historic peak of 104,289 yen an ounce, according to Reuters data going back to 1987.
Elsewhere, options traders are betting gold will hit $1,200 an ounce or higher by early next year. Strong options interest could in turn lift underlying prices further into uncharted territory.
Gold's gains lifted other precious metals, with platinum hitting its highest since September 2008 at $1,473.50, and silver its strongest since July 2008 at $18.91 an ounce.
Spot platinum was at $1,458 an ounce against $1,441, while palladium was at $369 against $361. Spot silver was At $18.56 an ounce against $18.46.
Close Change Pct 2008 YTD
Chg Close % Chg US gold 1164.70 17.9 1.6 884.3 31.7 US silver 18.610 0.170 0.9 11.295 64.8 US platinum 1467.60 25.70 1.8 941.50 55.9 US palladium 373.30 8.95 2.5 188.70 97.8
Prices at 2:25 p.m. EST (1925 GMT) Gold 1163.85 15.65 1.4 878.20 32.5 Silver 18.57 0.11 0.6 11.30 64.3 Platinum 1457.00 16.00 1.1 924.50 57.6 Palladium 368.50 7.500 2.1 184.50 99.7
Gold Fix 1169.50 3.50 0.3 836.50 39.8 Silver Fix 18.76 58.00 3.2 14.76 27.1 Platinum Fix 1464.00 5.00 0.3 1529 -4.3 Palladium Fix 370.00 0.00 0.0 365.0 1.4
(Additional reporting by Lewa Pardomuan in Singapore; Editing by Christian Wiessner)