NEW YORK (MarketWatch) -- Gold futures soared to a record high just below $1,050 an ounce Wednesday, as investment demand rose and as the U.S. dollar remained relatively weak. Holdings in the SPDR Gold Trust (GLD 102.21, -0.07, -0.07%) , the biggest exchange-traded fund backed by gold, rose for a third straight session to reach the highest level in three weeks. In foreign-exchange dealings, the dollar rebounded slightly against the euro and the Japanese yen, but the dollar index (DXY 76.55, +0.21, +0.28%) remained below the 77 mark. See Currencies. Gold for October delivery surged to an intraday high of $1,048.20 an ounce, a new record for front-month gold futures. The contract was last up $3.90, or 0.4%, at $1,042.50 an ounce on the Comex division of the New York Mercantile Exchange. Gold prices, as gauged by Comex front-month futures, have risen 18% this year. Gold for December delivery, the most actively traded contract, gained $3.10, or 0.3%, to $1,042.70, a partial retracement after hitting an intraday high of $1,049.70. "Gold has significant upside potential into 2010," said Jordan Kotick, an analyst at Barclays Capital, in a note. Technical analysis indicated that "resistance currently is at $1,370; history suggests a run at $1,500." In the coming weeks, gold is likely to rise as high as $1,120 an ounce, he added. Investors piled into gold ETFs as prices have been hitting new highs. Holdings in SPDR Gold Trust rose to 1,100.51 metric tons on Tuesday, up 2.44 metric tons from a day ago. Holdings stood at the highest level since Sept. 23. Underscoring investors' interest, Credit Suisse launched on Tuesday its first physically backed gold-exchange-traded fund. The new Gold Xmtch ETF, listed on the SIX Swiss Exchange, is in U.S. dollars and can be hedged in Swiss francs and euros. The fund invests in physical gold without using derivative instruments. "The prime driver of the recent rally in the gold price ... was the weakening of the U.S. dollar," wrote analysts at Nomura International in a note to clients. There is a very strong inverse relationship between the U.S. dollar and gold prices. When the dollar falls, gold prices tend to rise. Gold's Wednesday highs topped the earlier record hit on Tuesday, when the dollar slumped on a report suggesting the end of dollar-based oil trading and as Australia hiked interest rates. Also in metals trading Wednesday, December silver futures rose 5.5 cents, or 0.3%, to $17.35 an ounce. Silver prices have rallied nearly 55% in the year to date. October platinum gained $7.20, or 0.6%, to $1,325.30 an ounce, and December palladium rose $3.90, or 1.3%, to $314.20 an ounce. Bucking the trend, December copper fell 1.95 cents, or 0.7%, to $2.765 a pound. Harmony Gold raised to buy at Nomura In other news, Nomura International upgraded on Wednesday Harmony Gold Mining Company Ltd. (HMY 11.70, -0.05, -0.43%) (ZA:HAR 8,601, +601.00, +7.51%) to buy from neutral, saying it has the highest leverage to the appreciation of gold and it is the best value among South African gold equities. "While we generally agree that in the long run physical gold beats equities, we believe Harmony Gold and Polyus Gold offer attractive buying opportunities for the next 12 months," wrote the Nomura analysts. They reiterated a buy recommendation on Moscow-based Polyus Gold (OPYG.Y 24.20, +1.00, +4.31%) . Nomura also downgraded both AngloGold Ashanti Ltd. (AU 44.48, -0.31, -0.69%) (ZA:ANG 32,361, +1,842, +6.04%) and Gold Fields Ltd. (GFI 14.83, -0.06, -0.40%) (ZA:GFI 11,058, +758.00, +7.36%) to neutral from buy, citing recent rallies in the two South Africa-based companies. The bank also initiated coverage of Russian gold and silver producer Polymetal (POYM.Y 8.00, 0.00, 0.00%) with a neutral recommendation. Polyus Gold and Polymetal are both listed on the London Stock Exchange as well as on the RTS and Micex exchanges in Moscow.

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