Gold fell from a record high hit earlier on Thursday as the dollar lifted from its lows, but the metal was still expected to seek higher ground due to prospects for central bank buying and further dollar weakness.

Spot gold hit a record high of $1,194.90, but had retreated to $1,184.95 an ounce by 1213 GMT versus its last quote of $1,190.30 in New York late on Wednesday.

'For long term, the rally looks intact,' said Commerzbank trader Michael Kempinski. 'Even if we see a pullback there will be buying interest from the market to the dips, as long as we hold above $1,150 an ounce.'

Bullion has risen more than 37 per cent this year, including a 13 per cent rise in November alone on dollar weakness, expectations of further reserve diversification by central banks and fears of inflation next year.

Late on Wednesday, the International Monetary Fund said it had sold 10 tonnes of gold to the Central Bank of Sri Lanka, a part of the 403.3 tonnes approved for sale by the fund's executive board in September. The fund has already sold 202 tonnes to the central banks of India and Mauritius.

'It appears that central banks are prepared to expand their gold reserves despite the current high gold price level, which in turn increasingly attracts private investors back to the market,' Eugen Weinberg, analyst at Commerzbank said in a research note.

The dollar recovered some poise after hitting a 14-year low against the yen as traders betting against the US currency cashed in on its recent slide. Against a basket of currencies, the US currency was up 0.46 per cent.

US December gold futures also rose to a fresh high of $1,195.00 per ounce. Futures were last at $1,184.80 an ounce, compared with $1,187.00 on the Comex division of the New York Mercantile Exchange.

Gold has soared to new highs five times in the last ten trading sessions, and three times this week.

Gold's rally pulled other precious metals higher, with platinum rising as high as $1,480.00 per ounce, its highest since late August, 2008.

Silver was at $18.47 an ounce versus $18.82 an ounce while palladium was at $369 an ounce versus $370 an ounce on Wednesday.-Reuters