Gold is likely to continue its rally despite vaccine hopes boosting market optimism over recent weeks, according to several investment professionals, who said the increasing likelihood of inflation, geopolitical tensions and downward pressure on the dollar could continue to bolster the price of the yellow metal.
This comes hours after gold soared to an all-time high of $1,943.93 an ounce, as regional outbreaks of coronavirus have sparked fears of a second wave, and tensions between the US and China have worsened.
The commodity's previous price record was set in 2011 during the throes of the European sovereign debt crisis.
Year to date, gold's spot price has risen by more than 27% according to data from FE fundinfo.
While gold typically fares well during times of uncertainty or crisis, investment professionals say it is far less usual for stockmarkets and gold to move upwards in tandem - a trend that has continued since markets began to bounce back in March.
Mobeen Tahir, associate director, research at WisdomTree, said investors with equity exposure will still be looking to hedge against weakness in Q2 earnings, a rise in Covid-19 infections, potential poor economic data and geopolitical headwinds - notably rising tensions between the US and China.
He said: "Aside from frequent, but short-lived wobbles, equities have generally rallied since March on the back of significant monetary stimulus from central banks. This stimulus is unlikely to be withdrawn in the next few months. But equally, the economic and political risks are not likely to disappear either.
"This creates a scenario where both equities and gold could continue to push upwards. Investors may keep adding equity exposure but look to mitigate their downside risk."
Ned Naylor-Leyland, head of gold and silver at Merian Global Investors, said the bull market for both gold and silver - the latter of which has risen by 29% in value year to date - is "fully comprehensible" given economic conditions.
"Its roots lie in investors finally becoming disenchanted with the flagrant flouting by the world's central banks and governments of all common sense about sound money," he said.
"Recent monetary loosening, the swelling of central bank balance sheets, and the spike in government spending in response to the coronavirus may finally have tipped investors over the edge in their distrust of fiat currencies - especially the US dollar."
Given the dollar is now trading at a four-month low against the Japanese yen, a 15-month low against the Australian dollar, a 22-month low against the euro and a five-year low against the Swiss franc, chief market strategist at FXTM Hussein Sayed believes we are "clearly [seeing] broad weakness in the dollar and not driven by risk-on/off behaviour".
"Plunging risk appetite is no longer translated into a strong dollar, otherwise the tit-for-tat closures of the Chinese and US consulates which sent global equities lower last week should have driven inflows into the Greenback," he reasoned.
"I am still afraid to call the dollar's decline a structural change in the currency's outlook; the US dollar still represents more than 60% of global currency reserves, so it is only when this figure begins to decline that we might possibly call the dollar's weakness a structural change.
"However, several factors are driving the Greenback lower, with real yields being the dominant factor as the Fed is likely to continue holding interest rates lower for a prolonged period of time. For this same reason, gold is today trading at a new record.
In terms of whether the gold price is in a bubble, Sayed said bullion is still under its 2011 peak when inflation is counted for, and well below its 1980 peak when the metal reached $835 an ounce.