SINGAPORE (Reuters) - Spot gold prices soared above $510 an ounce on Tuesday, their highest since January 1980, buoyed by continued fund buying on inflation worries and increased diversification into commodities, dealers said.

However, profit taking and selling interest above $510 pushed the bullion market back to the previous day's closing level.

Spot gold briefly hit $510.30/511.25 an ounce before easing to $507.90/508.70 by 0708 GMT, down from $508.40/509.20 last quoted in New York on Monday. In January 1980, gold hit a record $850.