Published: Tuesday, 13 Oct 2009 | 4:05 PM ET

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Gold prices settled at another nominal high Tuesday as the dollar's slide to its lowest since August 2008 against the euro fueled buying of precious metals.

Silver, platinum, palladium and rhodium also rallied to multi-month peaks.

AP

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[US@GC.1  Loading...      ()   ] touched a peak of $1,068.30.

Most-active December gold futures settled up $7.50 at $1,065 an ounce on the COMEX division of the New York Mercantile Exchange after earlier touching $1,069.70

The all-time inflation-adjusted high of 1980 would be over $2,300 in 2009 dollars.

Gold has rallied 12 percent since the beginning of September as the dollar has weakened.

"The trend in the dollar is lower, and that is going to be the main focus," said Tom Hartmann, a commodity analyst at California-based Altavest Worldwide Trading.

"The outlook for the dollar will be predicated on the Fed, for one, hiking interest rates. But it doesn't look like that is going to happen any time soon," he added.

The dollar slipped against the euro and fell to a 14-month low against a basket of currencies as investors refocused on the outlook for U.S. interest rates.

Hartmann said it would be the second quarter of next year before "it is imaginable that any size hike will take place."

Currency and equity traders are awaiting the release of U.S. corporate results later in the week for clues as to the future direction of trade.

Oil also rose above $74 a barrel, to near its 2009 high. Strength in crude often benefits gold, both because it boosts interest in commodities as an asset class and as the precious metal can be bought as a hedge against oil-led inflation.

Gold enthusiasts are also taking heart from a pick-up in buying of gold jewelery in India, the world's largest bullion consumer last year, after an extremely sluggish year.

Demand for gold to back bullion exchange-traded funds is lacklustre, however. Holdings of the world's largest gold ETF, the SPDR Gold Trust, were steady on Monday.

Targets New Peaks

From a technical perspective, Commerzbank analysts pinpointed key resistance for gold around $1,066 an ounce. A failure to breach that level could push it back to its previous record high above $1,030 and from there to $1,000, they said.

Gold's rally also lifted the price of other precious metals.

Silver rose above $18 an ounce for the first time since July 2008, reaching a peak of $18.01. It was last at $17.70, versus a late Monday New York quote of $17.68.

Citigroup said in a research note it expects silver to average $16.00 an ounce in 2009 and $17.40 next year.

Platinum hit a 13-month high of $1,361.50, and palladium rose to a 13-1/2-month peak of $333 an ounce. Platinum was later at $1,353 an ounce, versus $1,336.50 late on Monday, and palladium was at $325.50, versus $325.50.

Rhodium, a platinum group metal, rose to $1,700 an ounce on Tuesday, having risen $100 an ounce in the past two sessions.

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