Gold leapt to another historic high today as investors rushed to buy the precious metal to protect against losses from the tumbling US dollar and record oil prices.

Prices jumped to an all-time high of $996.70 an ounce and analysts expect it to hit $1,000 today.

Gold has jumped 19% so far this year after a 32% rise in 2007.

The latest surge in the metal was driven by the freefall in the dollar to a 12-year low against the yen and a record low against the euro as fears mount over the health of the US economy and financial sector.

"If the dollar stays at this level, we might see $1,000 very soon," said Walter De Wet, analyst at Standard Bank.

A weaker dollar makes gold cheaper for holders of other currencies. The metal is also seen as a refuge during times of economic uncertainty and a hedge against oil-led inflation.

Oil was today hovering near its lifetime peak of $110.17 which was hit overnight.

"Every bit of bad US economic data boosts gold in two ways," Fortis Bank said in a market report. "First because it reinforces the return of its role as a safe-haven asset and second because the dollar falls on expectations of further Federal Reserve rate cuts."

Figures on the US retail sector are due out this afternoon and weak numbers could further bolster gold prices.

Inflation fears have been the main force behind soaring gold prices.

In the UK, concern about price pressures were heightened after the Bank of England's February inflation expectations survey showed Britons expect the cost of living in the future to rise to 3.3%. This is a series high and more than a percentage point above the actual CPI rate of inflation.

The quarterly survey showed expectations for inflation has picked up from 3% in November and 2.7% a year earlier.

People's perception of the current rate of inflation also leapt to a record 3.9% from 3.2% in November and 2.9% a year ago.

The monetary policy committee haS already expressed their fears of inflation risks despite signs that the economy is slowing.

Bank Governor Mervyn King has indicated that CPI inflation could well rise to 3% in the short term due to record oil prices and rising food costs.

"With oil prices trading at $110 this is not going to go away. This is a problematic position to be facing," said Audrey Childe-Freeman at CIBC World Markets.

The survey limits the scope for more interest rate cuts to help boost growth in the UK economy. The Bank has been cautious in easing borrowing costs, unlike the US Federal Reserve.

The MPC cut rates in February to 5.25% - the second cut in three months. Markets are pricing in a further three quarter-point cuts by the end of the year.

"The MPC is pragmatic about what is the right measure of inflation expectations but clearly a rise in their own survey is not going to help in bringing rates down quickly," said Philip Shaw, economist at Investec.

Paul Dales at Capital Economics said the survey increased the likelihood that the Bank will keep rates on hold next month and in May as well.