RPT-PRECIOUS-Gold marks record highs, tops $1,225/oz

(Repeats to additional subscribers)

* Persistent dollar weakness underpins market

* SPDR Gold holdings inch up near record high

* here

By Miho Yoshikawa

TOKYO, Dec 3 (Reuters) - Gold hit record highs over $1,225
an ounce on Thursday as the precious metal continued to attract
investors looking for an alternative to the dollar.

Gold has risen by more than 7 percent since touching a low
of $1,136.80 last Friday on fears of a possible default on debt
in Dubai, which spurred investors to sell the metal to raise
cash to cover losses.

Analysts say worries about Dubai's loan payment problems
still linger, although they have been pushed to the backburner,
with the dollar's persistent weakness coming to the fore.

Shuji Sugata, a manager at Mitsubishi Corp Futures, said
gold continued to be lifted higher because investors believed
the greenback would stay weak.

"The persistent view that the dollar will remain weak stems
from moves to review dollar-based assets and the belief that
interest rates will be stuck at low levels, and these are
factors that remain unchanged," he said.

Spot gold XAU= rose as high as $1,226.10 per ounce by
0521 GMT before drifting downward to $1,219.90, up 0.3 percent
from New York's notional close of $1,215.90.

U.S. gold futures for February delivery GCG0 touched an
all-time high of $1,227.50.

The metal reached record highs in euro and sterling terms
on Thursday, according to Reuters data, indicating independent
gold strength.

For a graphic on gold priced in different currencies,
click:
link.reuters.com/kyf74g

Gold has risen 25 percent in the last three months.

Gold denominated in yen, Swiss francs, euros, pounds and
Australian dollars is seeing returns of between 15 and 22
percent over the same period.

"Gold is being viewed as one of the primary alternatives to
holding paper currency and the gold price has become a key
barometer of investor confidence in government policies," said
Nigel Phelan, director of ETF Securities in Australia and New
Zealand.

Others said gold's link with currency markets was waning,
however.

"Everyone knows gold's running hot and more investors keep
jumping in," said Mat Kaleel, portfolio manager for commodities
investment fund H3 Global Advisors in Sydney.

"We could easily see it go up another $100," he said.

"Gold now appears to have its own momentum separate from
the currencies."

Investors were also taking heart from moves by central
banks to buy gold to diversify reserves.

India's purchase of about half the International Monetary
Fund's planned sales of 403.3 tonnes of gold has reinforced
views that gold has established itself as an investment asset
as well as an alternative currency. [ID:nSP375900]

Researchers with China's ruling Communist Party have said
the country should buy more gold to boost its holdings.

There is more scope for China to increase gold purchases,
but not in the open market and only over a long-term period, a
senior official from the China Gold Association told Reuters.
[ID:nT182381]

Strong investor interest in gold was also demonstrated in
the increase in holdings of the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust (GLD), which is nearing a
the record high of 1,134.03 tonnes hit on June 1. [GOL/SPDR]

It stood at 1,131.214 tonnes by Dec. 2.

The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust (SLV), said its silver holdings by Dec. 2
were down 3.49 tonnes, or 0.04 percent, from the previous
business day at 9,401.30 tonnes. Its holdings hit a record
9,404.79 tonnes on Nov. 30. [ID:nT82720]
Precious metals prices at 0519 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1220.05 4.15 +0.34 38.62
Spot Silver 19.25 0.05 +0.26 70.05
Spot Platinum 1500.00 -0.50 -0.03 60.94
Spot Palladium 388.00 0.50 +0.13 110.30
TOCOM Gold 3455.00 45.00 +1.32 34.28
97228
TOCOM Platinum 4245.00 70.00 +1.68 60.07
16587
TOCOM Silver 548.00 7.70 +1.43 71.63
552
TOCOM Palladium 1106.00 22.00 +2.03 101.09
341
Euro/Dollar 1.5085
Dollar/Yen 87.76
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(With additional reporting by James Regan in Sydney)
(Editing by Clarence Fernandez)
((miho.yoshikawa@thomsonreuters.com; +81-3 6441 1854; Reuters
Messaging: miho.yoshikawa.reuters.com@reuters.net))
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