Singapore - Spot gold climbed more than 1% to a record high above $1 920 on Tuesday, as concerns about a worsening eurozone debt crisis and stalled global growth drove investors from riskier assets to safe havens, including gold.
It was the 12th record high that spot gold has reached since the beginning of August. The rally is expected to continue, with investors unable to see a quick resolution to the eurozone crisis and the global economy at risk of slipping into another recession.
Investors are watching a string of legal and political events in Europe this week that could hurt efforts to resolve the debt crisis, after a dispute brok out between international lenders and Greece over disappointment that Athens had fallen behind schedule on cutting deficit.
Spot gold stood at $1 919.49 an ounce in early morning trade and has risen about 18% since the beginning of August. It is up 35% on the year so far.
US gold rallied 2.5% to a record high of $1 923.2, easing slightly to $1 922.50.
"After we broke above $1 900, people are now looking at $2 000 as the next target," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Fung said physical demand from India and China, the world's top two gold consumers, remained strong despite lofty prices, and helped keep gold premiums in Hong Kong in the range of $1 to $1.50/oz over spot prices.
Stimulus hopesFinancial markets will also closely follow the US ISM non-manufacturing index for August, due later in the day.
"If we get a negative reading, it will just reinforce concerns about a global recession and possibility of some form of stimulus from the Fed (US Federal Reserve) down the road," said Ong Yi Ling, an analyst at Phillip Futures.
As long as gold holds above $1 700, the bullish trend will persist and prices could hit $2 000 by the end of the year, she added.
India, the world's largest gold consumer, sees its festival and wedding season start later this month. Strong demand has defied record high prices, traders said.
The platinum gold spread dipped to a discount of more than $20, headed for a third consecutive session in negative territory. The last time the spread was in discount for a prolonged period was 1985.
Spot platinum rose to a two-week high of $1 889, before easing to $1 891.99.