Gold sweeps to record high above $1,080

By Frank Tang and Veronica Brown

NEW YORK/LONDON (Reuters) - Gold swept to a record high above $1,080 an ounce on Tuesday, defying dollar strength as the International Monetary Fund's 200 tonne sale of gold to India's central bank boosted sentiment towards the metal.

The purchase by the Reserve Bank of India underscored gold's increasing status as an official reserve. Gold's rally in the face of a stronger dollar also signalled the metal could rise further, dealers said.

Spot gold was at $1,087.25 per ounce at 2:20 p.m. EST (7:20 p.m. British time), up 2.6 percent from $1,059.15 quoted late in New York on Monday. Earlier, gold hit an all-time high of $1,087.45.

U.S. December gold futures settled up $30.90, or 2.9 percent, at $1,084.90 an ounce on the COMEX division of NYMEX.

The IMF said on Monday it had sold 200 tonnes of gold to India for $6.7 billion. The sale lifted some uncertainty from the market by helping soak up potential supply.

"It all generates from the fact that the IMF sold 200 tonnes to the Reserve Bank of India. That is very bullish as it takes 200 tonnes away from the direct market," said Bill O'Neill, partner at New Jersey-based LOGIC Advisors.

"That shows that future IMF sale will be conducted in a similar manner," O'Neill said.

The IMF sale, part of an agreement to sell about an eighth of the Fund's stock, fuelled speculation that other governments -- including Beijing -- may be ready to diversify their reserves even at near record prices.