LONDON — Gold prices soared to a record 1,174 dollars an ounce here on Monday as a sliding US currency and worries about a possible spike to inflation increased demand for the "safe-haven" metal, traders said.
Gold hit exactly 1,174 dollars an ounce in late trading on the London Bullion Market. It later pulled back slightly to stand at 1,170.32 dollars.
"Gold reached new highs as the dollar continued its decline," said ODL Markets analysts in a note to clients.
The dollar slid against the euro Monday on concerns that the Federal Reserve may keep emergency stimulus measures in place for a while longer, traders said. Comments by a US Federal Reserve official that he would prefer to keep the central bank's asset-buying programme active beyond its current cut-off date pushed the dollar lower, analysts said.
Federal Reserve Bank of St. Louis President James Bullard said an extension of the programme, widely considered a negative factor for the US currency, would give more flexibility to US policymakers.
"Central bank rhetoric provided fresh incentive" to push the dollar lower, said Jane Foley, analyst at online trading firm Forex.com.
"Gold prices printed another fresh high on the back of dollar weakness with Bullard's comments promoting the discussion of medium-term inflation potential, though economic data continues to indicate a absence of price pressures," Foley added.
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