Gold climbs to record US$1,148.40

The Dollar Index, a six-currency gauge of the greenback's performance, declined as much as 0.6 percent as the euro strengthened. It has lost 7.7 percent this year as bullion has climbed 30 percent in London. Gold, up for a fourth day Wednesday, typically moves inversely to the U.S. currency.

“With dips continuing to find support and the dollar potentially facing further weakness, gold seems set to extend its gains,” James Moore, an analyst at TheBullionDesk.com in London, said in a report. The metal may climb above US$1,150 an ounce in coming days, he said.

Immediate-delivery bullion gained as much as US$7.10, or 0.6 percent, to US$1,148.40 an ounce in London and was at US$1,148.20 by 11:25 a.m. local time. December gold futures climbed 0.8 percent to the day's high of US$1,148.80 an ounce on the New York Mercantile Exchange's Comex division.

The metal rose to a record US$1,146 an ounce in the morning “fixing” in London from US$1,134.75 at Tuesday's afternoon fixing. Some mining companies use fixings to sell production. Gold is set for a ninth annual gain as central banks, pension funds and individual buyers seek to protect themselves from potential currency debasement and inflation. Policy makers worldwide have set interest rates near zero and spent US$2 trillion to pull the world economy out of the worst recession since World War II.

Among other metals for immediate delivery in London, silver gained as much as 1.4 percent to US$18.69 an ounce, the highest price since July 2008, and was most recently at US$18.63. Platinum added as much as 0.6 percent to a 14-month high of US$1,464 an ounce and was last at US$1,463. Palladium rose 1 percent to US$376.50 an ounce.

The International Monetary Fund said this week it sold 2 metric tons of bullion, valued at about US$71.7 million, to Mauritius. The sale followed India's US$6.7 billion purchase of 200 tons, announced earlier this month. The IMF plans to sell a total of 403.3 tons to bolster its finances.

The rally has pushed spot gold's 14-day relative strength index, a gauge of whether a commodity or security is overbought or oversold, above the level of 70 viewed by some investors and analysts who follow technical charts as signaling a decline. “There could be a pullback,” said Aaron Smith, managing director at Superfund Financial Singapore Pte, who advised “long-term investors” to maintain their positions.

A strong dollar is in the world's best interest, Jean- Claude Trichet, president of the European Central Bank, said Tuesday. He spoke after a Bank of England policy maker said the U.K. risks inflation if it maintains stimulus spending too long.

Bank of England officials split three ways in a vote to extend a bond-purchase program to 200 billion pounds (US$336 billion), minutes of the Nov. 5 monetary-policy meeting published Wednesday showed. Gold was fixed this morning at about 681.62 pounds an ounce, the highest since March 9.

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