Gold prices hit record highs above $1,180 an ounce in Europe on Wednesday, boosted by the euro's move through $1.50 against the dollar and by a report that India may consider buying more bullion from the IMF. Spot gold hit a high of $1,182.70 an ounce and was bid at $1,179.90 an ounce at 1536 GMT, against $1,168.90 late in New York on Tuesday.
US gold futures for December delivery on the COMEX division of the New York Mercantile Exchange also hit a record $1,183.20 an ounce and were later up $14.40 at $1,180.20. Meanwhile India's Financial Chronicle newspaper said on Wednesday that India is open to buying more gold from the International Monetary Fund, which has around another 200 tonnes to sell. The IMF said it had no comment to make on the report.
-- Silver ETF holdings hit record in London, New York
Standard Chartered analyst Daniel Smith said further Indian buying could be "potentially very bullish" for gold. "Most commodities are rallying on the back of the weaker dollar, and that move is potentially quite significant," he said. "Gold has been outperforming on the back of this general rally in commodities, and that tells us that there is more to this than just the dollar story."
The market is sensitive to speculation of further official sector buying after news in early November, that India's central bank had bought 200 tonnes of gold from the IMF, sparked a rally. "We have had relatively supportive news from the central banks, particularly in Asia, confirming that there is demand for gold as a means of diversifying their large foreign exchange reserves," RBS Global Banking & Markets analyst Daniel Major said.
"Central bank and other investor demand could see gold move to $1,500/oz in the next 3-6 months," Fairfax said in a note. Elsewhere, holdings of the world's largest gold exchange-traded fund, the SPDR Gold Trust, rose nearly 1 tonne on Tuesday to their highest since late June. Silver was bid at $18.63 an ounce versus $18.49.
Holdings of the world's main silver ETF rose 136 tonnes to a record 9,252 tonnes on Tuesday, while ETF Securities' silver exchange-traded product also hit record levels. Platinum was at $1,466 an ounce against $1,444.50, while palladium was at $369.70 against $366.35. Holdings of ETF Securities' palladium-backed ETP rose to a record 620,359 ounces on Tuesday, and are up 11 percent month-on-month.