Adjusted for inflation, gold would have to settle somewhere near $2,400 an ounce to supplant a record around $850 an ounce reached in January 1980.
On Monday, the yellow metal futures hit a fresh record in electronic trading during Asian trading hours. Gold for August delivery gained $16.30, or 1.0% to $1,617.70 an ounce on the Comex division of the New York Mercantile Exchange. Last week gold reached a nominal record of $1,602.50 an ounce.
The metal has advanced aggressively on the uncertainty stemming from global debt problems in recent weeks, with the deadlock in U.S.negotiations taking center stage on Monday.
In Washington, lawmakers failed to reach agreement on an approach to raise the debt-ceiling on Sunday, despite long talks. The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk of defaulting on its obligations.
The lack of resolution in U.S. debt-ceiling talks will strongly affect the U.S. dollar and present upward potential for gold, as the asset class will be viewed as an alternative to paper currencies.
The dollar index slipped to 74.197, from 74.221 late Friday.
Lower dollar makes dollar-priced commodities such as gold cheaper for holders of other currencies.
