Gold ends at record high above $1,200

Precious metal continues record run on dollar weakness.

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By Hibah Yousuf, CNNMoney.com staff reporter

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NEW YORK (CNNMoney.com) -- Gold prices closed at a fresh record high above a $1,200 an ounce Wednesday, the first time it has settled above the milestone, as investors continued to build on the momentum of the precious metal.

Gold for February delivery climbed $12.80, or 1.1%, and settled at $1,213.

"There's still a rush to buy safe haven assets," said Carlos Sanchez, analyst at CPM Group. A weak dollar and concerns over economic conditions and financial markets, most recently because of what's happening in Dubai, have been boosting prices. "Investors are continuing to move toward gold as a hedge against other possible adverse events," he said.

Gold prices have surged more than 34% in 2009 and have risen steadily since the beginning of November.

While the dollar firmed Wednesday against the euro and the yen, gold prices were supported by the greenback because it remains soft as the Federal Reserve holds interest rates near zero into next year.

In a jittery economy, commodities priced in dollars, such as gold, are perceived as safe haven investments and typically gain ground with a weaker dollar.

Investors will continue to buy gold at high prices as they have been the past several months, Sanchez believes, leading prices to continue rising steadily. He expects them to near $1,400 during the first quarter of next year.

But after the $1,400 mark, Sanchez expects prices to lower and average around $1,000 for the remainder of 2010. To top of page

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