The price of gold has now risen 50% over the past year

The weak dollar has also boosted the metal, as this makes it cheaper for holders of other currencies.

Gold's record position was mirrored by other precious metals, with platinum also setting a fresh all-time high.

"There is room for gold to go higher," said Darren Heathcote of Investec Australia in Sydney.

Most fund managers have a herd mentality and they are just attracted to gains Robin Bhar, UBS Investment Bank

"We are in an uncharted territory, really."

Analysts added that gold prices were also being lifted by expectations of further cuts in US interest rates, high oil prices, and by speculative trading.

"It's human nature to buy into a market that is already showing strength," said Robin Bhar, metals analyst at UBS Investment Bank.

"Most fund managers have a herd mentality and they are just attracted to gains.

"Gold could go higher still, but we don't think this is a right time for buying."

Gold prices have now increased by 50% over the past year.