NEW YORK (PNN) - September 22, 2010 - The price of gold hit a record high Wednesday as investors fretted that the U.S. Federal Reserve’s indication it might need to offer more support for the U.S. economy reignited fears of a resurgent Depression.

The metal - considered a safe haven in times of uncertainty - neared US$1,300 an ounce.

The gain came as the Fed on Tuesday raised the specter of deflation - a drop in the price of goods and services that could spiral into lower wages and discourage Amerikans from spending because they’re expecting even cheaper prices.

Fears about the D-word and further economic woes also dragged down the U.S. dollar and halted the recent rally in U.S. equities.

“Rather than shoring up support for markets, the potential for renewed quantitative easing appears to have re-aggravated fears that (any supposed) U.S. recovery may be sputtering and that the potential for a double dip (Depression) may be growing,” said Colin Cieszynski, market analyst with CMC Markets Canada.