Allure of gold hits record height Gold hit a record high in euro terms on Monday after a series of central bank actions to prop up the ailing economy burnished the precious metal's allure. The change of heart towards gold has been spurred by a series of moves by some of the world's most powerful central banks. First, the European Central Bank promised to buy unlimited quantities of eurozone bonds; then the Federal Reserve launched a third programme of quantitative easing; and finally last week the Bank of Japan launched its own monetary stimulus. Anticipating the moves, investors have returned to the gold market en masse since mid-August. "It was the perception of QE3 that drove the investors back into the market," said one hedge fund manager. Investors raised their bullish bets on the gold futures market by 7.7 per cent last week to the highest in more than a year, according to Edel Tully of UBS. At the same time, investors have bought 74 tonnes of gold through exchange-traded funds since the start of the month. Prices, which had been languishing at about $1,600 a troy ounce in mid-August, surged as much as 11.7 per cent higher. In euro terms, the metal hit a fresh peak of €1,374.67 a troy ounce on Monday, surpassing the previous record high of €1,373.92 touched a year ago. The yellow metal has recently hit record highs in Swiss franc terms. In dollar terms it remains below last September's peak of $1,920, although many analysts see a fresh record high as a possibility in the next few months. "Gold finally found the catalyst it had been waiting for all year after the Fed announced open-ended quantitative easing," said Suki Cooper, precious metals analyst at Barclays. "Currency debasement, inflation fears, negative real interest rates for longer, increased liquidity amid a risk-on environment bode well for gold," she said, predicting that prices would average above $1,800 an ounce for the next six months. Michael Widmer, metals strategist at Bank of America Merrill Lynch, said each month of the Fed's mortgage purchases should lift gold prices by 0.7 per cent, predicting that prices would touch $2,000 in the second quarter of 2013 and $2,400 by the end of 2014. Finally, traders are becoming more optimistic about the prospects for a recovery in demand from India, traditionally the world's largest consumer of gold. Ms Tully said UBS" sales to India had been the highest in more than two months last Friday, as the rupee strengthened against the US dollar. "Continued appreciation of the local currency should help gold physical demand from India," she said.