Gold topped $US1,900 per ounce for a new record Tuesday but pulled back sharply in later trade as bulls returned to Wall Street and the euro made an upward jump.
In early Asian trading hours, the precious metal, regarded as a safe haven in times of economic turmoil — rocketed to $1,913.50, but fell in late New York trade to below $1,830.
The drop backward came as the US share markets jumped, with the Dow finishing nearly 3.0 percent higher and the Nasdaq adding 4.3 percent.
In recent weeks and months, gold has smashed its way through a series of historic peaks on mounting economic concerns.
But after trading around the $1,530 level in June and early July, the metal has made a sharp push higher on worries about the global economy.
Barclays Capital has forecast that gold prices will average $1,875 in the fourth quarter, and $2,000 per ounce in 2012.
“As long as global investor interest remains robust, prices are set to venture further to new highs,” Barclays Capital analyst Suki Cooper told AFP.
She added that levels of scrap supplies, weak seasonal demand and profit-taking could spark brief downward price moves.
“The price of gold should remain well supported in the present climate though and continue its upward trend for the time being,” said Commerzbank analyst Daniel Briesemann.
“The closeness of the $2,000 mark should attract further buyers. Investment demand especially is still lending support to the price.”
Demand has soared as worries over the eurozone debt crisis and the United States’ own debt problems frightened investors out of equities.
“We believe political/economic policy inertia with regard to debt management is likely to continue to drive appetite for gold into 2012/13,” added Societe Generale analyst David Wilson.
“We expect levels of over $2,000 per ounce to be achieved before year-end,” he added.
However, Forex.com research director Kathleen Brooks said that it could take some time for gold to make a clear run above $2,000.
“As it cracks fresh new highs, more people will take profit… so a convincing break above $2,000 may take a while.”
Traders are meanwhile awaiting this Friday’s address from US Federal Reserve Chairman Ben Bernanke, amid speculation that he could outline fresh steps to stimulate the ailing US economy in a key speech at Jackson Hole.
“The next big driver will be news from Jackson Hole,” said analyst Ross Norman at bullion broker Sharps Pixley, adding traders were eager to see “sensible (US) plans to relieve debt while maintaining some semblance of economic growth.”
