Gold reached $1,058 an ounce, powering past Wednesday's high of $1,048.4. On Tuesday it passed the $1,033.9 an ounce record set in March last year. Analysts said that there was still potential for prices to rise further if the dollar remained weak. However, there was caution that it may represent a price bubble. The price of gold is typically strong in the October to December period because of the higher demand for jewellery in the run-up to Christmas and the Indian festival of Diwali. Some argue that the possibility of higher inflation in the US as its economy recovers is another factor in lowering the price of the dollar, further boosting the appeal of gold. But others say the demand is driven purely by speculation, especially form institutional investors such as hedge funds looking for opportunities to make money in a climate where more traditional means of savings are offering low returns. Demand for gold is strong in India, and Indian communities around the world, ahead of the festival of lights, which this year falls on 17 October. This is because gold jewellery is typically given as presents - though some reports suggest that spending has been cut back this year because of the financial slowdown.