LONDON (Reuters) - Gold prices rose more than 1 percent on Wednesday as a record low dollar and soaring oil prices triggered bullion buying, analysts said.

Gold was at $979.75/980.45 an ounce by 12:47 p.m. EDT after rising as high as $981.90. Gold closed at $971.00/971.80 in New York late on Tuesday, when it fell on a dollar rally after central banks announced plans to boost liquidity.

"The dollar weakness has helped gold prices," said David Thurtell, analyst at BNP Paribas, adding prices would probably be well supported around $970-$975 until the release of U.S. retail sales and CPI data on Thursday.

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"With the market turmoil and the dollar weakness, chances are good that prices can reach $1,000," he said.

The euro rose to an historic high against the dollar as strong euro zone economic data renewed focus on the divergent paths of European and U.S. interest rates.

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

Oil rose to a record high as dollar weakness countered a larger-than-expected rise in U.S. fuel inventories.

Daniel Hynes, metals strategist at Merrill Lynch said the outlook for gold was still very positive.

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