Gold advanced near a 28-year high on this week as the slump of the dollar against the euro and rising energy prices prompted active buying.

The dollar fell to an all-time low against the euro, boosting the appeal of the precious metals as alternative investments.

Gold rose as high as $738.20 an ounce to move close to its highest since January 1980 at $739 on Sept. 21, but the level was turning into a psychological resistance.

Precious metals were drawing strong fund demand due to the dollar's fall and strong energy prices. The dollar had fallen to record lows hit by fresh evidence that a weak housing market could crimp U.S. growth and force the Federal Reserve to cut interest rates again.

The dollar slumped near record lows against the euro and a basket of currencies as investors awaited reports on U.S. consumers due later in the day for further clues about the strength of the economy.

The euro reached a new high of $1.4189

U.S. crude oil futures rose to above $83 a barrel, within sight of a record high hit last week supported by supply worries ahead of the winter season.

The trend is very strong backed by strong oil prices and the weak dollar, but the market still sees $740 as a major resistance for spot gold.