NEW YORK (MarketWatch) -- Gold futures climbed above $1,050 an ounce Thursday, marking a fresh record high for the third session in a row, as investment demand continued to rise and as the dollar weakened once more.
The gains come on the heels of what's been a four-session winning streak for the precious metal.
Holdings in SPDR Gold Trust (GLD 102.96, +0.60, +0.59%) , the biggest exchange-traded fund backed by physical gold, also rose for a fourth session, reaching the highest level in three months.
The dollar slipped against major counterparts after the European Central Bank and the Bank of England made no changes in their respective interest-rate policies.
Gold for October delivery rose to $1,057.10 an ounce, the highest level ever for a front-month contract. It was last up $1.10, or 0.1%, to stand at $1,044.40 on the Comex division of the New York Mercantile Exchange.
Gold for December delivery, the most actively traded contract, was up $3.40, or 0.3%, at $1,047.80 an ounce, retracing some of the earlier gains that had pushed it to an intraday high at $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," said James Moore, analyst at TheBullionDesk.com.
"However, the short-term outlook is again beginning to look top-heavy with gold vulnerable to a correction should the dollar recover," he added in a note to clients.
Gold's performance in the euro, British pound and other currencies has been lackluster compared to its rise in U.S. dollars, a trend suggesting investors are more interested in bullion as a hedge against the greenback than global inflation. See full story.
Holdings in SPDR Gold Trust reached 1,109.31 metric tons Wednesday, up 8.8 metric tons from a day earlier. 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, however.
Christopher Ecclestone, 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 foreign-exchange trading, the dollar fell against most of its major rivals, with the dollar index (DXY 76.14, -0.36, -0.46%) down 0.4% to 76.191, just slightly higher than the one-year low hit about two weeks ago. See Currencies.
A weaker dollar typically pushes up dollar-denominated commodities prices.
The European Central Bank, 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 did likewise, its key lending rate unchanged at a record-low 0.5%. 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 17 cents, or 1%, to $17.67 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 to $2.868 a pound, a 3.2% advance.
