Gold Hits Record, Closes in on $1,400

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"Prices more in line with interest rate environment, analysts said."

Gold futures turned higher Friday to post a fresh record, approaching $1,400 an ounce a day after their biggest one-day gain in roughly 20 months.

Gold for December added $14, or 1%, to $1,396.40 an ounce on the Comex division of New York Mercantile Exchange.

The metal went from losses to subdued gains to rally in less than three hours of floor trading.

Gold rallied to a record settlement of $1,383.10 an ounce on Thursday, a day after the U.S. Federal Reserve's decision to buy an additional $600 billion in U.S. Treasurys to stimulate the economy.

Quantitative easing gave investors a fresh reason to sell the dollar and seek a hedge against inflation in gold.

Silver and copper also gained on Friday. Silver for December delivery surged $0.81, or 3.1%, to $26.86 an ounce, a fresh 30-year high for the metal.

December copper added $0.70, or 1.8%, to $3.98 a pound, its best since May 2008.

The extended rally in metals overrode a gain in the U.S. dollar following a stronger-than-expected U.S. jobs report.

Fed officials Wednesday announced their additional bond-buying spree and kept rates near zero. Markets' reaction on Thursday was dramatic: Alongside surging commodities and treasuries, the Dow Jones Industrial Average surged more than 200 points to the level it was at just before Lehman Brothers collapsed in September 2008.

Gold is on track to rise to $1,650 an ounce over the next 12 months and could surpass that level, analysts at Goldman Sachs said in a note to clients Friday.

This week's rally moved "gold prices more in line with the low U.S. real interest rate environment," the analysts said.

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