The price of gold rose to an all-time high Monday, reaching $1,943 an ounce and eclipsing the previous record of $1,921 per ounce set in September 2011, according to NBC News.
The record high comes as the coronavirus pandemic and escalating U.S.-China tensions rattled investors, NBC News reported.
Also contributing to the gold’s increasing value are low interest rates and the dollar’s decreasing worth, according to UBS Chief Investment Officer Mark Haefele.
“While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar,” Haefele said Monday.
Price of gold versus 10yr real interest rates pic.twitter.com/A3IWc9XUUv
— Axel Merk (@AxelMerk) July 23, 2020
Tensions between the United States and China have also risen in recent weeks. The U.S. was ordered to close its consulate in Chengdu Friday after it ordered China to do the same to its consulate in Houston Wednesday.
Secretary of State Mike Pompeo also criticized China Thursday over its alleged human rights abuses and military aggression.
“You can’t go make claims for maritime regions that you have no lawful claim to. You can’t threaten countries and bully them in the Himalayas. You can’t engage in cover-ups and co-opt international institutions,” he said.
Despite gold’s rising price, many investors have warned investors to proceed with caution due to the highly unusual timing of its increase in value. Normally, individuals buy it as a hedge when stocks fall or when inflation is rising, CBS News reported, but neither the stock market nor the inflation rate is behaving that way right now.