Gold prices broke all records yesterday, skyrocketing about $20 an ounce to $373 in Europe and even higher in New York, as buyers all over the world exhibited their fear of inflation and anxiety to invest in a tangible asset.

It was the biggest one-day advance in gold price history. Investors big and small sent a simple message to the world's political leaders: they doubt governments have the ability or willingness to control the inflation spiral.

At one point yesterday, frenzied orders pushed the price of gold in London to an all-time high of $376.25, before it settled back to close at $372, up $18.50 from Monday. In the Zurich market. Europe's largest, the price was up $20.50 to close at $373.50 an ounce.

Among the heavy buyers -- continuing a trend of the past few months -- were oil-producing countries, especially the Arab states which now prefer to diversify their investments to include large amounts of gold. Formerly, Arab countries -- notably Saudi Arabia -- relied heavily on investments in U.S. Treasury and British securities.

In New York later yesterday, the price of gold soared even higher, closing at a record $376. Cash gold prices set a record at $383 an ounce, apparently indicating the trent for Wednesday in Europe.

"The gold-craze is an unhealthy development," said New York financial expert Henry Kaufman. "In effect, it's a vote against the established economic and financial system."

Buyers have turned to gold as a haven in a time of world financial and political uncertainty. The demand runs from one-ounce gold coins for small buyers to gold futures, gold mining shares, and bullion for large buyers. The latter is available in regular sales by the U.S. Treasury and International Monetary Fund.

Yesterday, the U.S. Treasury auctioned off a regular monthly allotment of 750,000 ounces at an average price of $377,79 an ounce, up a whopping $76.70 from last month's auction. The largest successful bidder uas the Bank of Nova Scotia, which took half of the amount on sale.

What astonishes financial markets as well as government officials is the frantic pace of the gold price advance. In just two weeks, the price has gone up more than $50 an ounce. In 1967 the full price was $35 an ounce.

Since the beginning of this year, the the price has increased by $160 an ounce. Now dealers talk breezily of the prospect of gold hitting $400 an ounce-- or more.

What has happened in 1979 confounded the "experts," including writers of gold-market letters. Mostly, they counselled during the steady advance from $215 an ounce in January that $300-- certainly $325-- would be a barrier, inducing heavy profit taking.

But the buying stampede continued and accelerated once the scope of the OPEC June price increase was realized. The 60 percent increase in world petroleum prices since last year assured a continuation of embarrassingly high inflation rates here and abroad.

On the other hand, the standard pattern of other years, which witnessed a dramatic drop in the international value of the dollar whenever gold prices soared, has so far not taken place. There were only minor declines in the exchange rate of the dollar relative to other currencies yesterday. Kaufman attributed this to substantial dollar support operations by the Federal Reserve, and the extraordinarily high interest rates it maintains here.

At the same time, the spectacular boom in gold prices means that the carefully contrived effort over the years by international monetary reformers to "de-monetize" gold, may have failed. At its present market value, gold holdings in the world's central banks far exceed the value of their foreign exchange (paper) reserves.

Not all countries value their gold at the market-- the United States and West Germany, for example, stick to the $42 an ounce "official" price. But with the market price nearing 10 times the official price, Kaufman suggested, "central banks now have a vested interest in keeping the price from dropping sharply."

A gloomy view of the dollar's prospects and a bullish one in gold was offered yesterday by bankers attending a New York conference sponsored by Institutional Investor Magazine. Several said they expected Arab oil states to continue to unload dollars and acquire gold.

"The U.S. dollar is likely to be weak," according to Michel Artaud, economist for the Societe Generale of France. "In my opinion, when the present movement of panic buying on the gold market stops, the Uest German mark is likely to appreciate farther, albeit to a moderate extent."

Heavy Arab gold buying was confirmed in Abu Dhabi yesterday by Saif Al Ghurair, a leading businessman in the United Arab Emirates, one of the OPEC cartel members. "With every petrol price increase, the price of gold too uill go up, and with every gold price hike, the price of petrol will be jacked up automatically," Al Ghurair said.

Under Secretary of Treasury Anthony Solomon said in a brief interview that the events in the gold market are "unfortunate" because they confirm that expectations about inflation are intense and widespread.

"I think it will increase [governmental] sensitivity to concerns about inflation. But I don't think it will result in any changes in macro-economic policy, or result in pressures on any particular currency," Soloman said.

In financial markets, the consensus is that gold is increasingly regarded as an investment, as uell as a speculation. There is concern, nonetheless, that the price of gold-- and silver as well, which has soared sympathetically-- may have boomed too fast, too far. "Gold can come down as fast as it went up," said one analyst.

But there are some differences in this particular gold cycle. For one, there is a greater American participation. For another, the amount of cash that can be injected by OPEC buyers is enormous, because of an expected $40 billion surplus this year. And since gold markets are relatively thin on any given day, prices can fluctuate wildly merely on Middle East buying.

A third factor is the attitude of central banks, especially in Europe, which formerly acted quickly to dampen meteoric gold booms in the private markets.

But under the new European Monetary System, eight member countries pool 20 percent of their gold and dollar reserve to support a new European Currency Unit (ECU). The gold in that pool is priced at the market, boosting the value of the kitty, and creating a new incentive to keep the price of gold high.

And while the United States and West Germany so far refuse to inflate theire reserves by counting gold at the world market price, others have no such reservations. The Bank of France, for example, values its gold on a three-month sliding market average basis. Some people believe that with swollen reserves, such countries feel little pressure to adopt tough measures to keep inflation under control.

Meanwhile, gold and related issues were discussed in Paris over the week-end by Treasury Secretary G. William Miller, Federal Reserve Board Chairman Paul Volcker, and their counterparts from England, Germany, France, and Japan. This was a regularly scheduled meeting prior to the annual meeting of the IMF in Belgrade, Oct. 2 to 5.

While they acknowledged that the gold price run-up reflected a broad concern over inflationary expectations, Miller and his colleagues were reported to be "relaxed" about gold price developments.