A frenetic day in the metals markets saw gold prices soar Thursday as a credit-rating upgrade for China weakened the dollar and an Al Qaeda call-to-arms spurred interest in so-called safe-haven investments. "The currency news about China is putting pressure on the U.S. dollar," says Randy Diamond at New York-based Miller Tabak, adding the threat of more terrorism only helped gold's case. "People are very sensitive and are definitely not blowing it off." The spot price for gold was trading around $634 per ounce in London, up $16.45 compared to the previous day. In New York futures trading, prices for December delivery soared to $653.80 before easing to close at $646, up $11.30 on the Comex Division of the New York Mercantile Exchange. Standard & Poor's upgraded China to A from A- as a result of "excellent growth prospects" and "improving fiscal flexibility," according to a release Thursday morning by the rating agency. The news comes as investors are increasingly confident the Federal Reserve will not hike interest rates at its Aug. 8 policy meeting in the light of more evidence of a U.S. economic slowdown. The combination weighed on the U.S. dollar, which was recently trading at 115.88 yen vs. 116.33 late Wednesday. Even gold bears say the recent run-up in bullion prices could have legs enough to send it further, perhaps even to record levels. "I think the factors that cause investors to want to buy gold" -- worries about inflation, a weak dollar and continued strife in the Mideast -- "will continue to deteriorate and we will see gold prices rise sharply," says Jeff Christian, managing director of specialty commodity consulting company CPM Group in a StreetWatch interview . Christian sees gold smashing through $700 before April 2007, and says it could hit $1,000 as seasonal buying adds to what he thinks will be solid investor demand. Thereafter, however, he's quite bearish and sees a decline caused by increased supply from new mining operations.