Spot gold and US futures topped $1,000 an ounce for the first time in six months today as the dollar's weakness and concerns about the sustainability of the global economic recovery underpinned sentiment.
Some market players were cautious about prices sustaining such highs, however, saying the rally had been driven by speculators and gold was an expensive buy in historical terms.
Futures have topped $1,000 nine times - three times this year and six last year, including a record $1,033.90. Spot gold has risen above $1,000 just five times - today, in February and three times in March 2008, when it hit a record $1,030.80.
"Gold's rising price is due to uncertainty all the way from personal investors right through to institutions," said SandraClose, an analyst for gold research group Surbiton Associates.
"There are questions out there over the health of economies, where interest rates are going. All that encourages gold hoarding. There's potential to see the price go even higher."
Spot gold rose as high as $1,002.55, its highest since February, when it briefly topped $1,000. New York's notional close was $993.85.
US gold futures for December delivery extended gains to $1,004.80. Futures settled at $996.70 on Friday. US markets were closed yesterday for the Labor Day holiday.
Despite gold hitting $1,000, it is far from an inflation-adjusted record, which analysts at GFMS have put as high as $2,079 per ounce.
Some analysts have said the higher gold price reflects uncertainty across markets about how central banks will untangle themselves from global fiscal stimulus aimed at reviving economic growth, as well as dollar weakness.
The Group of 20 finance ministers and central bankers said at the weekend they would not remove economic stimulus until the global recovery was well entrenched.
Others said buying momentum could wane to push prices back towards $950 before consolidating, given weak physical demand and a tendency by big Asian consumers to sell when prices rise.
Reuters