Gold has rallied 11 percent since India said on Nov. 3 it bought 200 metric tons of gold from the International Monetary Fund. The country, the world's largest gold consumer, is open to additional purchases from the IMF, the Financial Chronicle newspaper reported. The U.S. Dollar Index fell for a third day.

“Central-bank buying has been one of the main factors of this recent rally,” Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said Wednesday by phone. “The weaker dollar is driving commodities higher.”

Gold for immediate delivery added as much as US$10.80, or 0.9 percent, to US$1,180.20 an ounce and traded at US$1,178.05 by 9:53 a.m. in London. Prices may advance to US$1,200 next week, according to Fertig.

Bullion futures for February delivery on the New York Mercantile Exchange's Comex division climbed 1 percent to US$1,179.40 an ounce, after earlier reaching US$1,181.60. Up for a ninth day, futures are set for the longest stretch of gains since August 1982.

Reserve Bank of India Governor Duvvuri Subbarao declined to comment on the report. A further purchase would make the country's stockpile the world's eighth-largest, overtaking the Netherlands and Russia, according to figures from the producer- funded World Gold Council.

Among other precious metals for immediate delivery in London, silver added 0.7 percent to US$18.65 an ounce. Platinum gained 1.1 percent to US$1,464.50 an ounce, while palladium climbed 1 percent to US$372.75 an ounce.

“Actions from central banks are very important at the moment,” said Eugen Weinberg, an analyst at Commerzbank AG. “The purchase from India was like a seal of the prices above US$1,000 an ounce. Also, other central banks are buying gold.”

Russia and Sri Lanka have acquired gold, prompting analysts at Bank of America Merrill Lynch, Societe Generale and Barclays Capital to forecast more central bank procurement. Governments are the biggest holders of gold. Mauritius bought 2 tons of gold from the IMF last month for US$71.7 million after India's US$6.7 billion purchase.

The IMF, which set out two months ago to sell one-eighth of its gold reserves, still has more than 200 tons to sell. It will do so on a “first-come, first-served” basis, Andrew Tweedie, head of the fund's finance department, said in a Nov. 20 interview.

“The additional stimulus for gold is the increased demand emerging from central banks, who are now keen to diversify away from the falling value of dollar reserves,” said Mark Pervan, a commodity strategist with ANZ Banking Group Ltd. in Sydney.

Bullion typically moves inversely to the U.S. currency. The dollar index, a six-currency gauge of the greenback's value, slid as much as 0.5 percent Wednesday after figures showed that Japanese exports dropped at the slowest pace in a year. The currency measure is down 8.1 percent this year.

Assets held by the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, expanded for a second day Tuesday to 1,122.37 tons, the most since June 29. The fund's holdings reached a record 1,134 tons on June 1. Gold held in ETF Securities Ltd.'s exchange-traded products fell 0.5 percent to 7.936 million ounces Tuesday, its Web site showed.

“Speculators betting on higher prices have a very good argument on their side,” said Weinberg in a Bloomberg Television interview.