The gold price jumped to a new record high of $1095.65 on Wednesday after the price continued to capitalise on the news that India had bought 200 tonnes of gold from the International Monetary Fund.

The sale to India ? the largest central-bank purchase in at least 30 years ? was nearly half the 403.3 tonnes of gold that the IMF has targeted for sale over the coming years.

Earlier this week the IMF confirmed the sale to India's central bank, saying it had sold the precious metal over a two-week period last month for $6.7 billion in a bid to strengthen its finances.

Washington-based IMF currently holds 3217 tonnes of gold, making it the third-largest official holder of the precious metal after the US and Germany.

India is the world's biggest consumer of gold. It imports between 700 and 800 tonnes of the metal every year. That represents about 20 percent of global demand.

By 12.57pm gold was quoted at $1093.50 an ounce, up $8.70 from its previous $1084.80.

"While gold is vulnerable to long liquidation, the Reserve Bank of India purchase news yesterday could give rise to further diversification into gold in the coming sessions as investors shy away from the dollar and fiat currencies and turn towards physical/physically backed assets," said James Moore of the BullionDesk.

"Gold looks poised to post fresh highs into the $1080 to $1100 area," predicted Moore.

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