Gold hit a record high Monday as investors rushed into the safe-haven on concerns about China-US tensions, a spike in virus infections around the world and a lack of progress on a new stimulus bill in Washington.
After months of healthy rallies across equity markets -- fuelled by trillions of dollars in government and central bank support -- traders are beginning to step back as they weigh the long-term economic impact of the coronavirus.
With vast monetary easing measures put in place by the Federal Reserve pushing the dollar lower against most other currencies, gold is flying, with the spot price hitting an all-time high of $1,944.71, well above its previous record of $1,921.18 seen in 2011. It later pulled back slightly.
Eyes are on the Fed's next policy meeting this week, with some predicting further measures to boost the economy -- possibly negative interest rates -- that could put more pressure on the dollar and send bullion above $2,000.
There are also concerns that a worse-than-forecast reading on second-quarter US gross domestic product could spark another dollar sell-off.
While the weak dollar has been a key catalyst for the metal's advance, gold has also been boosted by its attractiveness as a haven in times of turmoil with China-US relations souring by the day.
"Strong gains are inevitable as we enter a period much like the post-global financial crisis environment, where gold prices soared to record levels as a result of copious amounts of Fed money being pumped into the financial system," said Gavin Wendt, senior resource analyst at MineLife.
The greenback was down against most other currencies, with the euro at its highest since September 2018, while higher-yielding units such as the South Korean won and Indonesian rupiah were also up.
- US stimulus struggle -
Stock markets were mixed as investors fret over the impact of the virus on the economy.
Hong Kong, Tokyo, Singapore, Mumbai, and Wellington were all in the red, while Shanghai, Sydney, Seoul, and Jakarta were higher.
The tech-rich Taipei market ended at a record high thanks to a 10 percent surge in heavyweight Taiwan Semiconductor Manufacturing Company, which has been riding a rally in the sector thanks to people working from home during the virus.
London and Paris fell in the morning, but Frankfurt edged up.
Investors are growing concerned about slow progress on a new US stimulus program, with Republicans still to present proposals worth around $1 trillion, which is less than a third of the plan set out by Democrats.
There are concerns an agreement could take some time, hitting millions of Americans whose much-needed extra unemployment benefits are about to come to an end.
Meanwhile, Hong Kong's stock market launched a new index Monday tracking China's tech giants. The Hang Seng Tech Index tracks the top 30 tech firms listed in the city, including Alibaba, JD.com, Tencent, Xiaomi and Meituan Dianping.
Hong Kong has become an increasingly attractive place for Chinese tech companies to list, especially as they face greater scrutiny and restrictions in the United States.
- Key figures around 0810 GMT -
Gold: UP 1.7 percent at $1,935.00 per ounce
Tokyo - Nikkei 225: DOWN 0.2 percent at 22,715.85 (close)
Hong Kong - Hang Seng: DOWN 0.4 percent at 24,603.26 (close)
Shanghai - Composite: UP 0.3 percent at 3,205.23 (close)
London - FTSE 100: DOWN 0.5 percent at 6,095.23
Euro/dollar: UP at $1.1706 from $1.1652 at 2100 GMT
Dollar/yen: DOWN at 105.54 yen from 105.95 yen
Pound/dollar: UP at $1.2817 from $1.2791
Euro/pound: UP at 91.30 pence from 91.07 pence
West Texas Intermediate: DOWN 0.5 percent at $41.09 per barrel
Brent North Sea crude: DOWN 0.5 percent at $43.12 per barrel
New York - Dow: DOWN 0.7 percent at 26,469.89 (close)
-- Bloomberg News contributed to this story --
TSMC - TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY (isin = TW0002330008)
Tencent (isin = KYG875721220)
Alibaba (isin = KYG017171003)
JD.com (isin = US47215P1066), Source: AFP