Gold surges to record after U.S. jobs

The dollar initially rose as investors were at first risk averse after the numbers, but as U.S. stock market indexes turned positive the greenback fell against the euro and a basket of currencies.

A weaker U.S. dollar makes commodities cheaper for holders of other currencies, while gold is often used by investors as an alternative to the dollar.

Gold rallied $25 on Tuesday, largely driven by India's purchase of gold from the IMF, which soothed investor nerves about possible oversupply.

"Most central banks outside of the US and Europe have low gold reserve ratios," Calyon said in a note.

"Those central banks with low reserve ratios and are keen to diversify into gold, notably those located in Asia, will be potential candidates to buy the remainder of the IMF's 203.3 tonnes of gold in an off-market purchase."

The high chances of Asian central bank gold purchases were reinforced by Sri Lanka, which said on Thursday it had been buying gold for the last five or six months.

Linked in with this is the dollar, which central banks will sell when they switch to gold from U.S. Treasuries.

However, some think Asian central banks may not hurry to follow India's lead given current record prices and the availability of cheaper domestically produced gold.

"Indian buying was very significant, but those getting excited about the potential for copy cat moves need to consider a number of factors," said David Thurtell, analyst at Citi.

"Culturally, India is more favourably disposed to gold than every other country. Second, it might be politically dangerous to be accumulating reserves at the all-time price high."