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Hong Kong - Gold hit a record high of $1 235.50 ounce by midday in Hong Kong on Wednesday, as investors sought a safe haven amid deepening concerns over the eurozone debt crisis.
The precious metal closed in Asia on Tuesday at $1 209.00, but later climbed as high as $1 224.82 an ounce in European trade.
Analysts said the commodity was likely to maintain its safe haven role while other markets remained vulnerable.
It opened at $1 229.00, just up from a previous record of $1 226.56 for the metal set on December 3 last year.
"The response of the central banks and the IMF [International Monetary Fund] to the southern European mess is almost guaranteed to ensure continued volatility in world markets," said Capital Spreads analyst Simon Denham.
Investors on Monday welcomed the European Union and International Monetary Fund aid package worth €750 bn to resolve the debt and budget deficit crisis in Europe.
However, the euphoria faded on Tuesday amid resurgent doubts over countries' ability to reduce their deficits.
"Gold is holding ground... and with doubts about the effectiveness of the EU/IMF already surfacing could be poised for a fresh challenge higher to target last year's all-time high," said analyst James Moore at TheBullionDesk.com.
The euro continued to be sold as investors became less risky. The single currency was trading at $1.2624 at 04:50 GMT.
IMF head Dominique Strauss-Kahn has hailed the trillion-dollar aid package as a big step forward.
However, higher gold prices indicated that traders remain sceptical over the deal, according to analysts.
"Investors are removing funds from risky assets into safer haven plays and this is positive for both the US dollar and gold," said City Index analyst Joshua Raymond.
"The EU rescue package has been widely interpreted as not a long-term solution to the deficit woes within the eurozone.
"With the near-term outlook remaining unstable, investors have sought to transfer their cash into defensive assets."
The precious metal, whose two main drivers are jewellery and investment buyers, hit record highs in 2009 on the back of inflationary fears and increasing moves by central banks to diversify assets away from the dollar.
Heightened concerns about Greece have attracted fresh inflows of cash into gold.
"This resilient performance... is perhaps telling of the scepticism markets still have over the execution of the plans and the tough fiscal challenges that will face some euro area economies," said Barclays Capital analyst Yingxi Yu.
"While markets remain jittery over the effectiveness of the plans, gold is likely to perform relatively well."
- AFP
