DANIEL Wills, senior analyst at ETF Securities, told Reuters Television that the higher gold price reflected some uncertainty across markets, as well as dollar weakness.

'It also seems to reflect ongoing uncertainty in terms of the likely impact from all the quantitative easing out there, in terms of how that flows through from money supply and into inflation,' he added.

The Group of 20 finance ministers and central bankers said over the weekend they would not remove economic stimulus until the global recovery was well entrenched.

While some analysts have argued the case for gold as a hedge against potential inflation when central banks try to navigate away from quantitative easing, others are less convinced - questioning the sustainability of bullion over US$1,000.

'I don't buy the argument about inflation concerns, it seems to be far too far-fetched at the moment when we're still looking at a deflationary environment,' said David Wilson, director of metals research at SocGen in London. -- REUTERS