Gold prices set new 16-year highs on Friday after the dollar came under renewed attack despite better-than-expected US jobs data, analysts and traders said. "The sole driver of buying interest is renewed concerns about the outlook for the US dollar in the short-term," Barclays Capital said in a morning report before the 1330 GMT data.
The re-election of President George W. Bush fuelled concerns about US fiscal and current account deficits, it added.
The euro roared back from a post-payrolls slide during the afternoon, scoring a new all-time high at $1.2950.
Gold stood at $433.80/434.50 by 1652 GMT, up from $428.95/429.70 in New York late on Thursday and just off its new peak of $433.90 - its highest since August 1988.
Gold is traditionally seen as a safe haven asset in times of economic and political uncertainty, but has attracted a much broader investor base this year as powerful funds have flocked to commodities.
"Though high prices always increase the probability of long liquidation, we don't rule out a test of $437.50 as long - and this is mandatory - as it is backed by a weaker dollar," broker Dresdner Kleinwort Wasserstein said.
Further out, investment bank J.P. Morgan saw a return of the bull trend from the 1999 lows. "We expect the market to stage sustainable rallies over the coming weeks/months with the initial medium term objective at 461/464 and potentially 500."
Frederic Panizzuti of trade house MKS Finance said: "We would not be surprised if gold reached new highs over the coming days and weeks - the upside potential seems real."
As well as the dollar's woes, gold is gaining as an inflation hedge against firmer oil prices and widespread global tensions - the metal is traditionally a safe haven.
"Overall the mix of another four years of Bush economic and political policies, geo-political instabilities particularly in the Middle East and the threat of terrorism all suggest higher gold prices, with $440 my target for the year," James Moore of the TheBullionDesk.com said.
Analysts said there was a band of resistance between $435.00 and $437.50, which were levels last visited in mid-1988. But much higher numbers are on the cards.
"On the charts gold is on the verge of a major break to the upside with an eventual target of $465 if the stubborn resistance just above $430 can be overcome on a closing basis," Standard Bank London said in a report.
"It's a bit too high for the buyers to really want to go for it and the investors' pockets are only so deep," one said, adding nevertheless that prospects of Far Eastern buying next Monday when the Asian market reopens was raising expectations.
Gold was last in the $460s in early June 1988, and had been as high as $470 in January of that year. In other precious metals, silver was at $7.42/7.45 an ounce from $7.39/7.42, platinum at $844.00/849.00 from $845.50/850.00, while palladium was virtually unchanged at $212.00/216.00.
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