Gold coins and bars (file photo)The gold rush continues as the price for the precious metal climbed to new heights this week. Inflation fears and worries about the weak U.S. dollar sent the price of gold soaring briefly above $1,060 dollars an ounce on Thursday, before settling back down to about $1,045 dollars. But analysts are divided on how long the upward trend can last.

As a weak U.S. dollar loses its luster in world markets, investors looking for safe harbor are turning their attention to gold. And because gold is traded in dollars, the declining value of U.S. currency is making the precious metal more attractive.

Gold bullion has gained nearly 20 percent this year, a trend metals analyst Dan Smith predicts will continue. "Gold will continue to push higher, although not at a dramatic pace, so that will be really continuing what we've seen over the last few months. So I think, $1,100 average for next year is our target, sorry, our forecast," he said.

Gold prices for December delivery surged briefly above historic highs Thursday, on fears that a declining dollar could spark inflation. But some analysts say gold rallies are almost always followed by a correction.

Investment analyst Nic Brown believes the rally is unsustainable. "Gold is exhibiting all the characteristics of a financial bubble. We see that investment flows are overwhelming the fundamentals of the market which are progressively weakening as the price continues to increase. For us it's a bubble. It is very difficult for us to know how much further it can go," he said.

High gold prices have been felt most acutely in India, one of the world's largest consumers of gold. October is traditionally peak buying season for gold in India as religious festivals get underway. But Abhinav Malhotra, the owner of Rama Jewelers in New Delhi, says fluctuating gold prices are driving consumers away. "Because one day it's in lower margin, another day it goes high. So there's not enough consistency in gold rates. Unless there's a consistency, you don't expect people to buy casually because festival buyers are generally casual buyers," he said.

Some investors are betting the price of gold will continue to rise as dollar-priced commodities such as oil lose their value against stronger currencies. Driving speculation is a reported plan by some oil producing nations to use currencies such as the Euro and the Chinese Yuan for oil trades.