SINGAPORE (Commodity Online) : Gold prices moved up smoothly in Asian trade Monday and inching towards a new record as the euro tumbled to a 4 year low against the dollar.

Gold for immediate delivery was seen trading at $1239.97 an ounce at 11.30 a.m Singapore time while U.S. gold futures for June delivery was at $1241.03 an ounce at the same time.

The euro plunged to a four-year low on Monday on persistent worries that harsh spending cuts mandated by a $1 trillion bailout plan may choke off a fragile recovery in the euro zone. Sterling hit a fresh one-year low against the dollar.

Meanwhile, gold priced in euro and sterling struck all time highs as falling currencies and fears a European bailout package could hurt, rather than help a recovery, spurred investor buying.

Bullion in the 16-nation single currency increased as much as 0.9 per cent to 1010.801 euros an ounce, gold in pounds jumped 1.1 per cent to 867.6694, while the metal priced in franc added 1 per cent to 1416.998 francs.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to a lifetime high of 1,214.065 metric tones as investors sought a safe haven from volatile currencies as well as declines in stock markets and oil.

On Friday, U.S. gold futures ended lower as options-related selling and investors' need for cash due to an equity markets sell-off dragged the market off record highs hit during the session

June delivery settles down $1.40 at $1,227.80 an ounce. Spot gold closed at $1,229.90 an ounce.