Gold's record-breaking run continues
The precious metal pushes to another high as the dollar slumps and investors remain concerned about inflation.
NEW YORK (CNNMoney.com) -- Gold rallied to its third record high in a row Thursday as the dollar continues to deteriorate and investors remain concerned that a bout of inflation is on the horizon.
December gold rose $11.90 to settle at a fresh all-time high of $1,056.30 an ounce. Earlier in the session, the precious metal surged to a high of $1,062.70.
Analyst expect the streak to continue, saying prices could top $1,100 an ounce by the end of the year.
"Dollar weakness and inflation are the two big drivers," in the gold market, said Joe Foster, a precious metals analyst at Van Eck Global.
The dollar was down 0.6% versus the euro and 0.7% against the British pound. The dollar index, which measures the buck against a basket of currencies, has declined 10% since March.
The greenback was under pressure after aluminum producer Alcoa (AA, Fortune 500) reported a surprise profit late Wednesday, which boosted the market's appetite for risk and sapped safe-haven demand for the dollar.
Many investors think the dollar will continue to depreciate as the nation's budget deficit explodes and investors flock to higher yielding currencies amid sings of a global economic recovery.
"Sentiment towards the dollar is overwhelmingly bearish," Foster said.
Gold is also being supported by persistent concerns that government efforts to stimulate the economy will cause inflation to rise in the future. Precious metals are seen as a hedge against rising prices because they store value better than other types assets.
"Though inflation is not an issue now, it's going to come back with force," said Kathy Lien, director of currency research at Global Forex Trading. "And that's why people are going long gold."
Some traders say the rally has been fueled by large investment funds and that the market is ripe for a correction given the strength of the recent push.
At the same time, demand for the metal from jewelry fabricators has been weak and record prices tend to bring out sellers of scrap gold, which makes for a poor fundamental backdrop.
But others say gold is poised to continue its bull run as the fallout from rock-bottom interest rates and U.S. fiscal policies drives investor demand.
Foster said he expects gold to peak near $1,300 an ounce next spring.
"The things that the Treasury and the Fed are doing to the U.S. financial system are setting gold up to be supported for some time," he said. 
