Gold hit yet another record high against all major currencies bar the Aussie Dollar and Japanese Yen in Asian trade on Thursday, peaking at US$1226.80 around lunchtime in Hong Kong.
"Volumes are thin. There is less buying in the physical market, and scrap seems to be entering the market faster," says Walter de Wet at Standard Bank.
"We remain cautious of buying Gold at current levels."
Early London dealing saw the US Dollar tick higher and gold slip 0.5%, while European stock markets gave back light gains and government bond prices fell.
Crude oil held above $77 per barrel. Gold priced in Euros and Sterling peaked above €812 and £735 an ounce.
"The build-up of [$1200-priced] December call options took place not just on Comex – which expired last month – but also on the over-the-counter market where expiry happens later this month," reckons Bhargav Vaidya, a Mumbai-based commodities advisor.
"Now that the target of $1200 has been reached, markets could correct from Thursday."
"Further gains are possible but the risk of a correction grows," agrees the latest Metals Monthly Asia produced by London's VM Group for BNP Paribas Fortis.
"Metrics such as the marginal cost of mining gold or the price at which the jewelry market can soak up [metal] point to much lower prices, but when investment is this strong they are less relevant."
"Once the buying has been satisfied," says London market-maker Scotia Mocatta in its technical note, "we would expect an equally violent correction. [But] at this point there is no technical pattern to suggest the up move has run its course.
"In one-way directional moves such as this, the unit is going to run until exhaustion."
On the demand side of the physical market, "We have been waiting for the Indian public to 'alter' its perspective on gold for more than a year," writes Edel Tully in her latest Refining Monitor for Mitsui, the Japanese trading house.
Formerly the world's hungriest private gold market, India has been overtaken in 2009 by Chinese households. Mumbai Gold Prices today rose 1.3% to hit a series of all-time highs, closing at 18,550 Rupees per 10 grams.
Spot Gold began the decade at Rs 3,700 for Indian buyers. "Will gold hit Rs 20,000...?" asks the Economic Times of India in an online poll.
"[At these prices] it is difficult to envisage a sea change in attitude in the near future," says Tully. But "in general, scrap flows do not seem sufficient to temper gold's rise.
"It is clear there is a certain level of underlying physical interest out of the traditional hubs."
US investors wanting to own Gold Coins meanwhile face both rising prices and higher dealer premiums according to industry sources.
"There is price resistance among buyers as many just can't get used to these levels," says Coins Magazine.
"There has been a kind of seesaw effect as premiums rise but bullion remains flat, then premiums stabilize and bullion rises," says the Numismaster website.
The US Mint's suspension of Gold Eagle production has driven up the price of other retail bullion products "such as Krugerrands and Maple Leafs" notes the South Oregon Mail Tribune, quoting a local dealer.
"The premiums on major Gold Coins, those at or close to an ounce of gold content, now sell for $5-12 per ounce more above the spot price than they did two weeks ago," says Liberty Coin Service's Patrick Heller.
That equals an extra 1% charge on top of the more standard 5% premium typically charged bullion coins. And in the absence of pre-2009 dated Krugerrands in the US market, current-year South African coins – although now "readily available" from wholesaler suppliers – come only "at a higher premium than did earlier-dated coins," says Heller.
"I anticipate that premiums will rise further before the end of the year and that supply shortages will spread to other Gold Coins and ingots."
Want to Buy Gold for less, store it securely and sell it for maximum value at a time of your choosing? Start with a free gram of Good Delivery gold now at BullionVault...