The move was replicated on the Comex division of the New York Mercantile Exchange, which saw December gold peak at $1,081.70/oz.
After reducing their positions in gold over the last several weeks, short-term and commodity trade advisory players are returning as buyers, traders said. The move upwards is being exaggerated by relatively illiquid trading conditions, they said.
Earlier comments by Indian finance minister Pranab Mukherjee that the country may look to further top up its recent purchases of International Monetary Fund gold are also being viewed as another vote of confidence in the metal.
Earlier Tuesday, India said it had bought 200 metric tons of gold from the IMF, almost half of the 403.3 tons it has earmarked for sale.
This suggests that the remainder of the IMF's planned 403.30 tons of gold will likely also be off-market, limiting any bearish impact. The deal will increase India's gold holdings to the tenth-largest among central banks, up from the current 358 tons, analysts said.
According to Evelyne Winters at Goldessential, the back-to-back IMF sales are supportive to gold for various reasons. "For a starter, it has removed already 200 metric tons of gold that were heading for the market over the next few years," she said.
Winters also said the sales also confirm a shift in perspectives, with central banks no longer just looking to get rid of their holdings. "Diversification of foreign exchange reserves now seems much more the reality," she said.
The focus of attention is now shifting to the tone of the statement accompanying the U.S. Federal Open Market Committee meeting, which comes to an end Wednesday with an interest rate decision due around 1915 GMT.
As of 1635 GMT, spot gold was trading at $1,078.35/oz, up from the previous high, in October, of $1,070.50/oz.