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NEW YORK (TheStreet ) -- Gold prices were hitting new record highs Thursday as inflation fears once again jump-started buying of the safe-haven asset.

Gold for December delivery was adding $9.20 to $1,277.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,279.50 and as low as $1,266.10.

The U.S. dollar index was losing 0.38% to $81.18 while the euro was adding 0.55% to $1.30 vs. the dollar. The spot gold price Thursday was rising more than $8, according to Kitco's gold index.

Investors piled into gold again as worries surfaced over inflation all over the globe. The core Producer Price Index in the U.S. rose an unexpected 0.4% in August.

The data comes after news that the Reserve Bank of India increased its repo rate and reverse repo rate to 6% and 5%; the latter was higher than expected. The central bank will now charge more for short-term loans it makes to commercial banks as well increasing the amount of money it will pay for loans from commercial banks.

The end result is to take money out of circulation. The hope is that the commercial banks will borrow less and hopefully store more money with the Reserve Bank to take advantage of better interest. Gold is the go-to investment when inflation fears spike because gold is a currency that retains some value when paper money weakens.

The Reserve Bank of India's move comes two days after the U.K's. higher-than-expected inflation reading and a day before Friday's U.S. core consumer price index report, which will be another inflation indicator for the U.S. The index only rose 0.1% in July and no change is expected for August.

There have been rumors that the Federal Reserve would buy more government bonds, effectively lending more money to the U.S. government. Although the central bank governors are reportedly struggling for a consensus, any hints of running printing presses could lead another surge into gold.

"What you're seeing is widespread belief that the central bank will engage in widespread additional quantitative easing," said Brian Kelleher, senior vice president of ETF Securities. "So investors are turning to gold as a way to protect against the falling value of the U.S. dollar and other fiat currencies."

The uncertainty in the currency market is also helping boost gold prices. The Bank of Japan has been trying to depreciate its currency to increase exports and help the country make more money. Despite Japan's best efforts, the yen was rising 0.23% vs. the dollar.