By Humeyra Pamuk LONDON (Reuters) - Gold shot to a record high on Wednesday, topping the previous day's gains, as dollar weakness and mounting worries about potential inflation enticed more investors toward the precious metal. Spot gold hit a historic $1,048.20 an ounce and was at $1,041.95 an ounce by 1200 GMT (8 a.m. EDT), versus $1,040.85 quoted late in New York on Tuesday. U.S. December gold futures hit a new peak of $1,049.70 an ounce. Gains were later trimmed as the dollar steadied from halted its slide versus a basket of currencies, while strong chart-based resistance at $1,050 per ounce also weighed. Other precious metals benefited from bullion's rally with palladium hitting $313.50 an ounce, its highest since August 2008 while palladium rose to a two-week high and silver climbed to a three-week high. "The demand is coming almost exclusively from the investment side," said Eugen Weinberg, analyst at Commerzbank. "Gold reaching an all-time high is attracting new investment. his momentum can take us to even $1,100 an ounce," he said. "As long as we don't see a sustainable rally in the dollar, I don't think it (the rise) will stop," Weinberg said. The dollar remained under pressure but managed to steady against a basket of currencies. "We could see some price weakness ahead in the short term," said analyst Manquoba Madinane at Standard bank in Johannesburg. "There's a strong resistance at $1,050 an ounce," he said. "If the dollar gains, that would put pressure on gold." Bullion has gained nearly 20 percent this year, helped by dollar weakness and on the back of escalating inflation worries after the central banks and governments across the globe poured billions of dollars into the financial system to revive growth. However, current prices are still sharply below the inflation adjusted record pinpointed by analysts. Metals consultancy GFMS put that figure as high as $2,079 an ounce.

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