Gold hits record above $1,167/oz

"Gold has entered a seasonally bullish period... and is also performing well when priced in the other major currencies," the note said. "Such a backdrop suggests higher prices (channel target at $1,175) into year-end."

Investment buying has also been encouraged by a spate of acquisitions of gold by central banks, most notably that of India, whose purchase of 200 tonnes of the precious metal from the International Monetary Fund was announced in early November.

Option traders are betting gold will hit $1,200 an ounce or higher by early next year, and strong options interest could in turn lift underlying prices further into uncharted territory.

On the physical side of the market, Indian gold buying cooled after picking up slightly last week as prices hit record highs and the flow of scrap eased, dealers said.

"Buying is negligible compared to the regular daily volumes," said a dealer with a state-run bank in Mumbai.

Nabavi said some light physical demand had been seen out of Asia overnight.

Gold's gain lifted other precious metals, with platinum hitting its highest since September 2008 at $1,472.

Spot platinum was at $1,470 an ounce against $1,441, while palladium was at $369 against $361. Spot silver was bid at $18.81 an ounce against $18.46, having earlier hit a peak of $18.88, its strongest since July 2008.

ETF Securities said holdings of its platinum- and palladium-backed exchange-traded commodities rose to record highs on Friday.

(Additional reporting by Lewa Pardomuan; editing by William Hardy)