Gold rose to a new record on Tuesday on speculation that currencies will depreciate, triggering inflation and boosting the appeal of the precious metal for investors. As for the role of the dollar, it's premature to expect an end soon to its dominance.

Gold futures climbed as much as $1,045 an ounce in New York, overtaking the previous record of $1,033.90 in March 2008.

The spot price is heading for a ninth straight annual gain - - the longest rise since at least 1948.

The gold price first closed above $1,000 for the first time on March 14, 2008, just before investment bank Bear Stearns was sold to JP Morgan, then dropped to almost $700 last November before rising again past $1,000 last month.

In January 1980, gold rose to a high of $850. The inflation-adjusted 1980 peak today is about $2,312.

On Tuesday, Middle East based journalist Robert Fisk wrote in the London Independent of a plan to to de-dollarise the oil market. This is not a new issue.

Today, Fisk writes: "Saudi bankers are well aware that in nine years' time - - the current timeframe for a transition away from the dollar in oil trading to Japanese and Chinese currencies, the euro, gold and a possible new Gulf currency - - China will have doubled its national income to $10trn (assuming a growth rate of 7 per cent), at which point the US might hold no more than 20 per cent of the world's gross income.

Such massive financial movements, encouraged by the de-dollarisation of oil, will have enormous political effects in the Middle East, especially if economic superpower rivalry between America and China comes to dominate the Arab world. Will American economic support for Israel remain as loyal in nine years' time if China and the Arabs are setting the pace in global financial markets?"

What may happen in the next 10 to 20 years is what the former US defense secretary would have called a"known unknown."

When will China freely float the renminbi?

In the past year, China has expressed concern about the value of its dollar holdings of US treasuries, which it has partly accumulated because it has kept its currency undervalued to boost exports.

The holdings increased from $550 billion in 2008 to $800.5 billion in July 2009.

Total foreign holdings of US treasuries, were $3.4 trillion in July 2009.

The US dollar will remain the main reserve currency for the foreseeable future.

According to IMF data, which covers roughly two-thirds of the world's foreign exchange reserves, in June 2009, the dollar's share of roughly $4.3 trillion reserves of which the composition is known, rose to $2.7 trillion in absolute terms or 62.8 per cent of the total. It was 65 per cent at the end of the first quarter.

The IMF estimated that at the end of the second quarter, global reserves stood at $6.8 trillion, up from $6.5 in the first quarter.

Emerging market reserve holdings were $4.2 trillion.

Data showed the euro's share of known reserves rose to 27.5 per cent compared to 25.9 percent in the previous three months. The euro accounted for about 18.1 percent of allocated reserves at the end of the first quarter of 1999 when it was launched.

The gold investment firm GoldCore commented on Tuesday's price record: "A close above the record high today should set us up for the anticipated rally to $1,200/oz. However, profit taking could see a correction and consolidation above the previous resistance at $1,020/oz.

Gold remains well below record highs in euro and sterling and is likely to rally to new record highs in these currencies in the coming weeks. Investors waiting for a pullback may be disappointed and it may be more prudent to start to dollar (euro/pound) average into position by buying over a period of days and weeks. This market could get away from those attempting to time the market and buy in at short term lows.

Silver has also surged in value to over $17/oz on the news but remains well below its recent record high of nearly $21/oz, and well below the record nominal high for silver of $48.70/oz, set nearly 30 years ago in January, 1980. Silver remains very undervalued vis-à-vis gold.

Gold looks far from a bubble (less than half its real price in 1980) but whether it is or not is irrelevant. It is important that all investors and savers have an allocation to gold as financial insurance."

Montreal-based bullion dealer Kitco, says gold miners have invested more than $40 billion in new projects since the bull market began in 2001.

In the first half of 2009, high prices triggered sales from the public of 900 tons of gold jewelry, old coins, and other scrap while demand for industrial and jewelry gold has fallen 20 per cent in the past year, according to GFMS, a precious-metals research group.

As with other commodities, gold is not a one-way bet.

SEE: Finfacts article July 2009: China has pegged currency to US dollar since July 2008 to help exporters; Emerging markets expected to keep currencies undervalued as crisis risks recede

Finfacts gold page

What investors should do about the loss of confidence in the Greenback, with Andrew Busch, BMO Capital Markets; Joe Lavaorgna, Deutsche Bank; Adam Boyton, Deutsche Bank and CNBC's Brian Shactman: