Gold hit a fresh record high near $1,150 an ounce on Wednesday, boosting precious metals across the board, as a dip in the dollar index added to momentum buying as prices broke through key technical resistance levels.
In non-U.S. dollar terms, gold also climbed, hitting multi-month highs when priced in the euro, sterling and the Australian dollar.
Spot gold hit a high of $1,147.45 and was at $1,146.05 an ounce at 0948 GMT, against $1,141.50 late in New York on Tuesday.
U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange also hit a record $1,148.10 and were later up $7.10 at $1,146.40 an ounce.
Yesterday the market took a breather and tested below $1,130 very quickly, (but) a few physical related bargain hunters were lined up to grab the dip, said Afshin Nabavi, head of trading at MKS Finance in Geneva.
The market is being underpinned by fresh interest in gold from the official sector, he said, after a recent major bullion acquisition from India and smaller buys by the central banks of Mauritius and Sri Lanka.
The acquisitions underlined gold's appeal as a portfolio diversifier, especially in an environment where further dollar weakness was expected, analysts said.
The dollar eased back on Wednesday from its biggest rise in three weeks in the previous session, as traders awaited U.S. inflation data due at 1330 GMT.
The dollar index, which measures the U.S. currency's performance against a basket of six others, was down 0.37 percent, while the euro/dollar exchange rate firmed.
Other commodities also climbed, with oil rising back toward $80 a barrel and copper to 13-1/3 month highs near $7,000 a tonne. Both are being lifted by the weak dollar.
Gold traders are awaiting key U.S. consumer price index numbers later in the day for clues as to the next direction of trade, both due to its effect on the currency markets and on bullion itself, which is often seen as an inflation hedge.
Low inflation pressures are traditionally a negative for gold prices, said HSBC analyst James Steel in a note.
If, however, weak inflation data are seen as allowing the Fed to continue to pursue easy monetary policies, this may be seen as supportive of gold.
Gold rose in currencies other than the U.S. currencies, reaching its highest since late February in euro terms, since early March in sterling terms, and since early May when priced in the Australian dollar.
The physical market was quiet, however, with India's gold demand abating as prices struck fresh record highs after offtake picked up slightly in the previous two sessions, while scrap flow eased on hopes for higher prices.
Gold's strength also lifted other precious metals, with silver hitting a 16-month high at $18.66 an ounce and platinum reaching a peak of $1,462, its highest since September 2008.
Later silver was bid at $18.63 an ounce against $18.40, while platinum was at $1,455.50 an ounce against $1,453 and palladium was at $374 against $370.
Given the bullish tone in the rest of the complex and increasing investment demand, both metals are likely to test higher in the coming sessions with resistance above pegged at $1,490 and $400, said TheBullionDesk.com analyst James Moore.
(Editing by James Jukwey)