Spot gold hit a record as the dollar plunged and concerns about the global economy boosted demand for havens.
Futures also touched a high as a contract roll provided a further boost to its rally.
Bullion’s move came as a gauge of the dollar fell to its lowest in more than a year amid negative real rates in the US and bets that the Federal Reserve will keep its monetary policy accommodative when it meets this week.
Inflows into gold-backed exchange traded funds this year have surpassed a record set in 2009, with total holdings at a high of more than 3,300 tonnes.
Spot gold climbed to $1,923.20 (Dh7,063.91) an ounce, topping the previous high of $1,921.17 set in 2011.
Futures also touched a record on Monday and traded at $1,946.90 by 10.25am in Singapore (6.25am UAE time).
December overtook August as the contract with the highest open interest on Thursday, although final data was not released until the Friday trading session was already under way in Asia.
The December contract touched $1,927.10 an ounce on Thursday, above the record for the most-active contract of $1,923.70 reached in 2011.
“Strong gains are inevitable as we enter a period much like the environment [after the 2008 financial crisis], where gold prices soared to record levels as a result of copious amounts of Fed money being pumped into the financial system,” with a weak dollar and negative real rates providing further impetus, said Gavin Wendt, senior resource analyst at MineLife.
Investors have poured into gold as the coronavirus pandemic's impact on global growth underpinned the metal's status as a safe haven.
However, gold is receiving support from a long list of factors: geopolitical tension is rising, real rates have tumbled, the dollar is weaker and government and central banks worldwide have unleashed vast stimulus measures to try to boost economies.
The environment has even raised the spectre of stagflation, a rare combination of sluggish growth and rising inflation that erodes the value of fixed-income investments.
In the US, investor expectations for annual inflation over the next decade, as measured by a bond-market metric known as break-evens, have moved higher in the past four months after plunging in March.
US bond markets have been a key metric to watch and a driving force behind the rush to gold, which is serving as an attractive hedge as yields on Treasuries that strip out the effects of inflation fall below zero.
Traders are again eyeing record low yields, with dimming hopes for a sharp US growth recovery fuelling expectations that the Fed is about to signal more accommodation ahead.
Investors will get a steer from the Fed this week, with officials meeting from July 28 to 29.
Expectations are they will keep interest rates near zero, while markets will also be watching for any signals around shifts in strategy.
The meeting may be a platform for a strong message that change is coming, opening up the possibility for more unconventional policies further down the line, according to Chris Weston, head of research at Pepperstone Group in Melbourne.
“If we think about real yields and what the Fed is doing, it just suggests to me that it is a matter of time before real yields continue to trend lower and gold goes higher.”
Most analysts are bullish on the metal’s outlook. Goldman Sachs said the metal could reach $2,000 in the next 12 months, and Citigroup puts a 30 per cent probability on prices topping that level by the end of this year.
