Gold consolidated below the 910 usd mark after racing to a series of fresh record highs yesterday, fuelled by a combination of dollar weakness and economic uncertainty.

At 10.13 am, spot gold was trading at 906.05 usd per ounce against 905.70 usd in late New York trade last night, having hit its all time record high of 914.10 usd yesterday morning.

'So far this morning gold has been in a firm mood but has met resistance at 910 usd,' said TheBullionDesk.com analyst James Moore. 'Sentiment is still very bullish though as the market continues to see strong investment demand.'

Gold has risen by by almost 300 usd since the onset of the credit crunch in mid-August, as a combination of economic fears, softness in the dollar and rising inflation have seen investors pour into the precious metal. Investors have been using gold as a store of wealth and as an alternative form of currency reserves given the dollar's recent slide.

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'Gold has effectively become the world's third reservable currency. It is the anchor or quiet harbour to which frightened... and not so frightened... capital seems to return,' said Dennis Gartman, editor of daily trading note The Gartman Letter.

The start of the new year has also seen a large influx of investment money into commodities as funds diversify away from equities in light of the ongoing economic uncertainty, with fears of a recession in the US writ large.

CNBC television reported yesterday that Citigroup (nyse: C - news - people ) could write down as much as 24 billion US dollars in losses on subprime mortgage-backed investments and eliminate up to 24,000 jobs when it reports its fourth-quarter earnings later today.

While gold's rally has impressed many market watchers, with many now touting the 1,000 usd mark, analysts have cautioned that downside risks still remain. Imports into India, the world's largest gold jewellery market, have fallen by as much as 20 pct over the past year in response to higher prices, though rising interest from China has supported demand so far.

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