(Updates prices, another high, adds details, comments)
LONDON, Nov. 6, 2007 (Thomson Financial delivered by Newstex) -- Gold hit its highest level since January 1980, as wider economic stress prompted safe haven buying, the dollar hit another record low against the euro and high oil prices stoked inflation jitters.

The metal hit 817.25 usd this morning. Gold has gained over 20 pct since mid-August, when fallout from the US sub-prime mortgage crisis started to hit global markets. Gold prices have risen 30 pct since hitting a low intraday on Aug 23.

Worries that the US banking system is failing returned yesterday after the markets digested news from Citigroup (NYSE:C) that its chairman, Chuck Prince, resigned after the bank admitted suffering big losses from sub-prime mortgages.

'Gold prices continue to draw strength and succour from the ongoing credit market crisis,' said HSBC analyst James Steel.

The precious metal was also rallying because of dollar weakness, with the greenback just off another record low against the euro this morning.

Meanwhile, oil prices, which are less than 2 pct off a record high struck late last week, continue to stoke inflation jitters.

'As the consensus predicts another draw of (US) inventories, rebounding crude oil prices might push gold to a fresh 27-year high,' said Dresdner Kleinwort analyst Peter Fertig. A weekly US report due out tomorrow is expected to show crude supplies dropped for another week, and analysts are expecting New York crude prices to hit the 100-usd milestone.

Gold moves in line with oil prices as investors hedge against energy-led inflation, and in the opposite direction to the dollar which is seen as an alternative asset.

At 10.07 am, spot gold was trading at 817.00 usd an ounce, against 809 usd in late New York trade on yesterday, having earlier hit 815 usd -- its highest value in almost 30 years.

Earlier today, ETF Securities said ETFs (Exchange Traded Funds) 'Physical Gold' was the fastest growing gold ETF over the past four months, increasing by 1,200 pct, showing investor demand has picked up rapidly.

Elsewhere, on the physical demand side, analysts said jewellery demand has remained strong and because prices show no sign of subsiding, buyers are forced to buy on any dips.

Looking ahead, the market will listen to US Fed chairman Ben Bernanke who will speak Thursday on the the US economic outlook, to get clues as to how serious the recent turmoil is.

'General sentiment in financial markets remains concerning,' said Standard Bank analyst Walter De Wet. 'Financial institutions are under pressure, and it seems a near certainty that more credit write-downs from Wall Street's biggest financial institutions are in the pipeline.'
Not only is the gold price well bid in dollar terms, the World Gold Council (WGC) said the metal hit a sterling record yesterday at the PM fix of 386.71 stg an ounce, suggesting bullion's rise is not all dollar-driven.

The WGC said lower gold mine output, strong jewellery demand, easier access to investing in the metal and increased interest from funds have helped the recent rally.

'The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset class,' said a WGC analyst. 'Portfolios that contain gold can be more robust and better able to cope with market uncertainties than those that do not.'
Among other precious metals, silver was trading up at 14.87 usd, against 14.86 usd in New York yesterday.

Platinum was slightly higher at 1,462 usd from 1,461 usd, while palladium dropped to 369 usd from 373 usd