Worries of more government intervention in European and U.S. debt crises lifted gold early on Tuesday to a record near $1,800, but bullion pared gains as the battered stock market bounced higher.
As investors waited for the Federal Reserve to weigh in on the latest market turmoil, spot prices of bullion were up nearly 1 percent at around $1,730 an ounce by 1530 GMT,
Bullion has gained about 13 percent since the end of June. Before Wall Street rebounded in the morning, bullion peaked at a session high of $1,778.29.
"The market could come off from here, but it's headed in a northerly direction," ANZ head of metal sales Peter Hillyard said. "From where we are now, you might think we could see some sort of pull-back. But I'm talking about a momentary thing, a pull-back like the loading of a gun, which then fires away."
Gold priced in euros hit an all-time peak above 1,250 euros an ounce and was set for its biggest two-day rally since May 2010, when the euro zone debt crisis first flared. The euro fell to a record low against the Swiss franc for a third straight day.
Gold in sterling and yen also hit records.
Technically, gold appeared well supported for further gains, albeit after a pullback.
"We're well above all the daily-moving averages; the 21; the 55; the 100; and the 200. So that suggests upside momentum," said Eric Viloria, senior technical strategist for at forex.com.
"But it looks like gold's little exhausted in this area even if the long-term trend still remains upward. We'll be looking for a potential correction. But I'll also view any correction as an opportunity to buy further."
The Fed was scheduled to make an interest rate decision and release a statement on Tuesday and the S&P rose more than 2 percent on Tuesday on talk that the U.S. central bank would unveil a plan to combat the markets meltdown linked to fears of a new recession.
Stockmarkets tumbled on Monday, the first session since the United States lost it top-tier credit rating. Wal Street's S&P 500 index posted its biggest daily loss since December 2008 and neared bear market territory.
A Reuters poll showed the United States faced a one-in-four chance of slipping back into recession, and there was potential for more Fed stimulus to avert that -- which could give a boost to safe-havens such as gold.
Oil prices were up more than 1 percent, hovering above $82 a barrel, after Monday's 6 percent dive.
Reuters technical analyst Wang Tao said the ratio between spot gold and U.S. oil is expected to rise to 34 over the next 12 months, as indicated by its wave pattern.
Reflecting the rush into gold, holdings of metal in exchange-traded funds rose for a twelfth day to an all-time high near 70 million ounces, equivalent about half of total supply in 2010, based on World Gold Council data.
But the gains in gold also pushed investors who had lost big on equities to liquidate the precious metal so they could cover losses.
Top asset manager BlackRock will use profits it is making in gold and bond markets to seek out bargains in falling global equity markets, James Holt, investment strategist at the world's largest money manager, said Tuesday.
Among other precious metals, silver fell around 2.5 percent on the day to around $38 an ounce.
Platinum rose about 2 percent to around $1,748 an ounce, while palladium fell 3.3 percent to around $714 an ounce.
(Additional reporting by Jan Harvey in London; Editing by David Gregorio)