There is a lot of investors' interest in gold right now and investors' sentiment is the key driver for gold prices and demand and supply imbalances makes gold prices soar even higher recording a high of $988.90 after opening today's session at $982.55 an ounce.

Gold which is seen as a hedge against oil-led inflation continues its journey to the upside as analysts are expecting the US dollar to come under increasing downward pressure and soaring oil prices triggers more bullion buying.

Oil prices surged above the $110 a barrel level mark as the dollar sank to new lows and outweighed the large increase in crude inventories which was reported yesterday on the EIA. Investors have raced into commodities for quit a while now to hedge against inflation and the slumping dollar, sending oil prices to fresh peaks despite concerns about the US economic health which is considered the top oil consumer. This also served the everlasting rally in gold prices supporting gold prices at high levels.

The dollar tumbled to a record low against the euro as doubts grew about the impact of recent Feds efforts to pump money into the credit market in the attempt to ease the credit crunch crisis. A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand which in turn boosts gold prices to such record highs we see today.

With the market turmoil and the dollar weakness, chances are good that gold prices can reach $1000 an ounce.