By Moming Zhou & Myra P. Saefong, MarketWatch
NEW YORK (MarketWatch) -- Gold futures rose Thursday for a fifth straight session, climbing above $1,050 an ounce and marking a fresh record high for the third session in a row, as investment demand continued to rise and as the dollar weakened again.
Holdings in SPDR Gold Trust (GLD 102.61, +0.25, +0.24%) , the biggest exchange-traded fund backed by physical gold, rose for a fourth session to the highest level in three months. The dollar slipped against major counterparts after the European Central Bank and the Bank of England made no policy changes.
Gold for October delivery rose to $1,057.10 an ounce, the highest level ever for a front-month contract. It was last up $10.60, or 1%, to $1,053.90 an ounce on the Comex division of the New York Mercantile Exchange.
Gold for December delivery, the most actively-traded contract, was up $12.80, or 1.2%, at $1,057.20 after hitting an intraday high of $1,059.60.
"Given inflationary concerns and dollar weakness, the metal could look to test above $1,120 during the quarter as investors continue to diversify their portfolios," James Moore, an analyst at TheBullionDesk.com said in a note to clients.
"However, the short-term outlook is again beginning to look top heavy with gold vulnerable to a correction should the dollar recover lost ground," he added.
Holdings in SPDR Gold Trust rose to 1,109.31 metric tons Wednesday, up 8.8 metric tons from a day ago. That's the highest level since July 13.
"The fact that the gold price broke through the old high of March 2008 is obviously attracting financial investors to the gold market," said analysts at Commerzbank in a note.
If demand for gold ETFs continues to rise, "a further gold price increase has to be expected, especially as short-term oriented market participants are likely to be jumping on the bandwagon."
Some analysts questioned whether the rally in gold prices could continue.
Christopher Ecclestone, a mining strategist at Global Hunter Securities, said gold's strength was "like a feather being pushed up by the lightest of breezes. There is no substance to the rise."
In currencies trading, the dollar fell against most of its major rivals, with the dollar index (DXY 76.13, -0.37, -0.48%) down 0.6% to 76.069, just slightly higher than the one-year low hit about two weeks ago.
A weaker dollar typically pushes up dollar-denominated commodities prices.
The ECB, which sets monetary policy for the 16 nations that use the euro, left its key lending rate unchanged at a record low of 1%. The Bank of England left its key lending rate unchanged at a record-low 0.5% and made no changes to its 175 billion pound ($278 billion) money-printing program of asset purchases. See full story.
For now, "gold prices continue to trend higher, driven by the same factors as in previous days -- a weaker [U.S. dollar] and still-low bond yields," analysts at Credit Suisse wrote in a note to clients issued Thursday.
Also in metals trading Thursday, December silver futures rose 30 cents, or 1.7%, to $17.80 an ounce.
October platinum gained $8.80, or 0.7%, to $1,329.30 an ounce, and December palladium rose $4.95, or 1.6%, to $319 an ounce.
December copper added 8.85 cents, or 3.2%, $2.868 a pound.
