NEW YORK (MarketWatch) -- Gold futures extended their climb Thursday, jumping past $1,225 an ounce to hit a fresh high for the 20th session since the beginning of November, as weakness in the U.S. dollar boosted commodities prices.
Gold for December delivery surged as high as $1,226.40 an ounce in overnight electronic trading, after ending Wednesday's floor trading on the Comex division of the New York Mercantile Exchange above $1,200 for the first time ever.
The metal recently reduced its gains, as the dollar's weakness shrank. December gold was last up $2, or 0.2%, at $1,214 an ounce on the Comex.
"Gold continues to defy gravity and for good reasons: The shift out of fiat currency such as the dollar is happening at a swifter pace than most imagined it would," said Kevin Kerr, president of Kerr Trading International.
Gold futures have soared 37% this year and have made gains in 17 of the past 20 weeks. They advanced in all but two trading sessions in November.
In economic news Thursday, the Labor Department reported the number of Americans filing for state unemployment benefits fell by a seasonally adjusted 5,000 to 457,000 in the week ending Nov. 28.
Economists surveyed by MarketWatch had expected initial claims to rise to about 480,000.
In currencies, the dollar index (DXY 74.65, -0.02, -0.02%) , which tracks the performance of the greenback against a basket of other major currencies, edged down 0.1% to 74.611.
The dollar and gold prices have had a strong inverse relationship in recent trading.
Gold's latest move builds on the sharp rise that started in November and was triggered by the news that India's central bank bought 200 metric tons of the metal from the International Monetary Fund, said Daniel Wills, senior analyst at ETF Securities.
"Many market participants view this purchase as just the tip of the iceberg, with China, Russia and other central banks also indicating their intention to build up gold holdings as part of their strategy to diversify away from the U.S. dollar," he said in a note.
Gold has also historically been seen as a safe-haven asset, to which investors flock at times of financial and economic turmoil.
Dubai's debt woes have helped spur the realization that the danger for investors is not just that companies or banks could fail, "but that eventually entire states/nations may be at risk on the ground of escalating debt [and] escalating budget deficits," said Martin Hennecke, associate director at Tyche Group Ltd.
State-owned conglomerate Dubai World sent shock waves through global financial markets last week when it announced it was seeking a standstill on its debt. The company is currently holding talks with creditors to restructure about $26 billion in debt.
Some still bearish
Despite gold's spectacular bull run, some analysts remain skeptical that the gains will last.
"I cannot think of, nor have I read of, any coherent economic reason for gold at this level," said William Gamble, president of Emerging Market Strategies in Rhode Island. "Gold has climbed too far, too fast."
He says gold is "a massive bubble, fueled mainly by [exchange-traded funds'] speculation dominating a small market, with help from developing countries trying to diversify out of dollars."
Holdings in all gold ETFs rose to a new high of 1,771.4 metric tons as of Wednesday, according to data collected by Barclays Capita.
Holdings in SPDR Gold Trust (GLD 118.69, -0.49, -0.41%) , the biggest gold ETF, rose to 1,131.21 metric tons, the highest level since June.
