Gold soared on Tuesday and moved to a fresh record high above $1,080 per ounce after the International Monetary Fund announced large sale to India. The dollar also backed off recent highs, increasing gold's hedge value.

December gold rose to $1,084.90 per ounce, up $30.90 on the session. Prices reached as high as $1,084.90.

This shatters the old record of $1,072 reached last month for the precious metal. When adjusted for inflation, however, gold moved near $2,000 in 1980.

The International Monetary Fund announced the sale of 200 metric tons of gold to the Reserve Bank of India . The amount of gold being sold represents almost half of IMF's total sales volume of 403.3 metric tons that was approved by the Executive Board in September.

The dollar backed away from a four-week high against the euro and also slipped off a nine-day high against the pound.

The Federal Open Market Committee's two-day policy meeting begins. Rates are expected to be left unchanged near zero for the foreseeable future, but traders will watch accompanying comments for clues on future moves.

Earlier, the ADP employment report is due at 8:15 a.m. ET. Jobs are expected to decline 190,000 in October, compared to a drop of 254,000 in September.

On the economic front on Tuesday, a Commerce Department report showed that factory orders increased by 0.9 percent in September following an unrevised 0.8 percent decrease in August. The increase in orders came in slightly above economist estimates for an increase of about 0.8 percent.