Gold futures closed with strong gains, after briefly soaring to a new record just below $1,000 an ounce after the dollar tumbled lower and crude oil continued to rally, boosting the metal's appeal as hedge against inflation.

Gold for April delivery rallied $22.20 to end at $988.50 an ounce on the Comex division on the New York Mercantile Exchange. Earlier it soared to a record high of $995.20 an ounce. The precious metal gained 31 percent in 2007 and has risen 15 percent so far this year on concerns about the dollar, oil prices and worries of a U.S. recession.

Crude-oil futures surged to close above $104 a barrel for the first time after data showed U.S. inventories fell unexpectedly and after the Organization of Petroleum Exporting Countries agreed to keep cartel members' production levels unchanged at a meeting today in Vienna.

Crude for April delivery rallied $5, or 5 percent, to settle at $104.52 a barrel on the New York Mercantile Exchange.

In currency trading, the dollar fell to a new record low against the euro as escalating oil prices gave the European currency a lift above the $1.53 level.

The dollar index, which tracks the performance of the greenback against other major currencies, fell 0.3 percent to 73.49

Short-term though, gold is still vulnerable to profit-taking, although yesterday's correction has pulled the metal out of overbought territory, said James Moore, an analyst at TheBullionDesk.com, in a research note.

Bargain-hunting support has been found this morning and given the still negative outlook for both the U.S. economy and the greenback, it does seem inevitable that gold will challenge $1,000 an ounce in the near future, said Moore.

Short-term though, gold is still vulnerable to profit-taking, although yesterday's correction has pulled the metal out of overbought territory, he added.

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