Gold has jumped to a fresh record high as investors fret over the impact of the trade war between the US and China.
Spot gold rose above $3,500 (£2,645) per ounce on Wednesday, before dipping from its peak. It has risen by around 30% since the start of the year.
The latest move comes after the head of US central bank said President Donald Trump’s tariff policies are likely to mean slower growth and higher prices.
The precious metal is viewed as a safer asset for investors during times of economic uncertainty.
Gold is in “full lifeboat mode” as it has become “the most crowded trade on the planet,” Stephen Innes from the SPI Asset Management firm said.
“The dollar is stumbling under the weight of trade-policy whiplash, and portfolio managers have lost faith in anything that involves political discretion,” he added.
Analysts have compared this year’s gold rally to the Iranian Revolution, where prices jumped by almost 120% from November 1979 to January 1980.
Gold crossed $3,000 an ounce for the first time last month as uncertainty over the impact of a global trade war set in.
Jesper Koll from advisory firm Monex Group said investors have flocked to gold as “a trust hedge against both inflation and government recklessness”.
“Everyone is looking for ‘real’ assets. It’s increasingly clear that Team Trump’s ‘move fast and break things’ approach to policy making will not change,” he added.
The introduction of tariffs by the Trump administration, which are taxes charged on businesses importing goods from overseas, has fuelled fears of inflation, which has driven investors to so-called safe haven assets like gold.
Trump has put taxes of 145% on China since he returned to the White House in January, and China has retaliated with a 125% tariff on US imports.
There is also uncertainty about whether sweeping US tariffs on a host of other countries will go into effect, after being paused for 90 days.
In remarks for the Economic Club of Chicago on Wednesday, Federal Reserve Chair Jerome Powell said the higher-than-expected tariffs announced in recent weeks are likely to mean US economic growth will slow and rising prices for consumers.
The comments come after a period of turmoil on global financial markets as investors reacted to the new import taxes coming into effect and the escalating trade war between the US and China.
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