Bullion roared to a record on Monday above $1,700 an ounce as an unprecedented downgrade to the U.S. credit rating sent investors scrambling out of riskier assets, hammering equity markets and the dollar.

U.S. gold futures touched an intraday high at $1,702.7 an ounce, while cash gold, which hit its 11th record in 19 sessions, and could rise further if pledges by the Group of Seven nations to support battered financial markets fail to bear fruit.

The one notch downgrade by Standard & Poor's of the U.S. long-term rating on Friday added to the threat of contagion from the euro debt crisis, fears over recession in the United States and even the possibility of a third round of U.S. quantitative easing.

The Federal Reserve's policy-setting committee, the FOMC, meets on Tuesday. Investors are watching for any statement on whether the Fed will ease monetary policy further.

Cash gold touched a lifetime high around $1,699 an ounce, lifting the price of silver by more than 5 percent. The U.S. December gold contract earlier hit a

record above $1,700.

"I guess the uncertainty in the financial markets is keeping gold prices underpinned. It's essentially safe-haven buying," said Ong Yi Ling, investment analyst at Phillip Futures.

"One of the events that investors will watch is of course the FOMC meeting that is scheduled Tuesday ... investors will scrutinise the statement on the assessment of the economy and outlook for monetary policy."

Gold priced in sterling jumped to a record around 1,033 pounds following gains in dollar-priced gold. Bullion priced in euro was near last week's record.

Finance chiefs from the world's industrial powers pledged on Sunday to take whatever actions were needed to steady financial markets, spooked by the political wrangling in Europe and the United States over slashing their huge budget deficits.

Treasury Secretary Timothy Geithner said U.S. Treasury debt is as safe as it was before the S&P downgrade, urging European leaders to ensure there is an "unequivocal financial backstop" for euro zone governments facing fiscal and debt problems.

Asian shares fell on Monday, after a week which saw $2.5 trillion wiped off companies' values, but the euro jumped on hopes the European Central Bank will act to stop the euro zone debt crisis engulfing Italy and Spain.

The lingering economic crisis has been a boon for safe havens like gold, which has risen for six successive weeks and is up 13 percent since the start of July.

"Whilst we don't get that lead from the States, we've still got concerns in Europe and the markets are quite happy to take it on, and I think that's generally what we are seeing," said Jonathan Barratt, managing director of Commodity Broking Services.

"I think that the G7 can't do much about what is occurring here."

Gold, which has gained more than 19 percent this year, had shrugged off data showing the U.S. economy generated 117,000 jobs last month and unemployment fell to 9.1 percent.

The dip in the jobless rate reflected more of a contraction in the size of the work force than an improved employment picture.

"I think troubles in Europe are also undermining markets. Progress in dealing with Europe sovereign debt issues is painfully slow," said Natalie Robertson, a commodities strategist at ANZ.

"But prices are overbought at the moment. If you look at the RSI, it's above the 70 level. If you look at technicals, it could be vulnerable to some profit taking."

Data released by the U.S. Commodity Futures Trading Commission showed managed money in gold futures and options raised their net length to a five-year high in the week up to Aug. 2.

In the energy market, crude fell more than $2 a barrel on Monday on the S&P downgrade.