Gold hits new record high

In afternoon trading on the London Bullion Market, gold hit a record $1 258.38 an ounce.

"This could open the door to further appreciation towards the $1 300-level in the coming weeks," said Rajesh Patel, head trader at financial betting firm Spread Co.

"The dollar has been due a fall, what with its strength versus the euro and sterling lately, and a falling dollar pushes gold higher as it makes it cheaper for investors outside the US to buy gold, increasing demand.

"The drop in jobless claims and the manufacturing index yesterday in the US also add to investors concerns."

The new high smashed the previous record of $1 252.11 per ounce that was forged on June 8 as investors sought the safe-haven metal amid mounting concerns about the eurozone debt crisis.

Gold, whose two main drivers are jewellery and investment buyers, is viewed as a safe-haven investment in times of economic trouble.