By David Lew
Gold price is booming. As markets opened across the globe on Monday, gold prices hit a new historic record of $ 1,166.45 an ounce in Europe, boosted by weakening dollar. Bullish over the big weekly opening for gold, bullion analysts are now predicting that gold will touch $1,200 per ounce this week.

So, the real gold rush is on. What is driving up the gold price? Central bank purchases, dollar decline, currency fluctuations, stock markets uncertainties, collapse of banks in the United States, the high-play of deflation and inflation in several countries…The reason are several.

How far can gold price go? Some say it will touch $1200 per ounce this week. Others argue that the precious yellow metal will surge to touch $2000. But some anti-gold commentators predict that gold price is on a bubble that can burst any day and collapse to $900 or less soon.

Here is a re-cap of today’s news.Here is what Dubai-based bullion analyst Mark Robinson told Commodity Online:

"Gold is booming thanks to the collapse of dollar in the global currency market. Gold is running to hit $1,200 per ounce any day this week.”

He said that gold price is booming because of the expectation that US interest rates will remain low putting pressure on the dollar. "This has turned gold into a big investment asset for central banks and traders across the world," Robinson said.

He said growing demand from central banks across the globe to accululate gold reserves as a better asset class than the US dollar is driving up the gold prices. "It is not consumer buying that is helping the big jump in gold prices. It is the mass investment appeal for gold from central banks to big investors is driving the gold prices these days," Robinson added.

Following is a CNBC report on the gold’s daily rise:

The Dollar Index is off its 14-month lows. Last week it was trading in at around 74.68. We have seen a level of 75.88 in early markets today. The dollar has eased off a bit from there. There have been some strong statements coming in from the ECB on the back of which the euro strengthened.

There is also some important data coming in from Europe today – the Europe manufacturing figures – which the markets would be watching out for.

The strength in dollar continues to give strength to commodities as well. We have seen gold trade at record high – at around USD 1,164 per ounce and the Indian markets also have breached Rs 17,500 per 10 grams.

Silver prices are also trading at record highs in the Indian markets. This has to do with the COMEX gold expiry today, which is keeping the markets very volatile. Many people are betting on USD 1,200 per ounce and that is taking the prices on the higher side.

The international markets have also been hit with inflation concerns – large visible funds now investing in precious metals. That also is taking prices higher.

There are very strong chances in the markets today that you might see gold prices headed towards USD 1180 per ounce in the US session today.