Central banks returning to the gold markets is sweeping prices even higher.

Thailand is considering adding to its gold reserve while South Korea revealed Tuesday it purchased gold for the first time in 13 years the past two months.

"Central banks are providing support in two ways - direct purchasing activity and the signal it sends to investors, which is a very positive one," says Philip Klapwijk, chairman of precious metals consultancy GFMS.

The fragile global economic environment has cast doubt on major trading currencies, forcing both central banks and retail investors to look at quasi-monetary assets like gold.

Comex December gold up 1.6% at $1,670.70/troy ounce after earlier hitting another record.