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The price of gold surged to a record above $1,934 per ounce on Monday as investors moved money into an asset seen as a safe haven amid jitters about U.S.-Chinese tension and the recovery from the coronavirus pandemic.
It added 2 percent to surpass its 2011 highs, and put $2,000 per ounce in sight. Silver climbed 7.5 percent, to take its July streak past 30 percent, which would be its best month on record.
Prices of gold and silver have jumped as rising infection numbers and job losses in the United States and some other economies fuel concern the recovery from the virus and the worst global downturn since the 1930s might be faltering.
Precious metals, along with bonds, often are seen as stores of value when financial markets decline. Forecasters watch their prices as an indicator of how investors see the economic future.
China took over the premises of the U.S. consulate in the southwestern city of Chengdu on Monday, after ordering that the facility be vacated in retaliation after the U.S. ordered the shutdown of China’s consulate in Houston amid accusations of spying.
Also, hopes for a quick U.S. economic recovery are fading as coronavirus infections showed few signs of slowing.
That means the economy could suffer without fresh support from the government, with some earlier steps such as enhanced jobless benefits due to expire this month.
Senate Republicans were expected to unveil a $1 trillion stimulus package late Monday. Treasury Secretary Steve Mnuchin said the package will contain extended unemployment benefits with 70 percent “wage replacement.”
Concerns about the U.S. economic outlook have also started to weigh on the dollar. The dollar index, which measures the greenback against six other major currencies, dropped 0.5 percent to its lowest level in nearly two years.
This article contains information from Reuters and The Associated Press.