Gold prices rose to an all-time high Friday as investors sought safety in the precious metal amid rising U.S.-China tensions and lingering fears over the coronavirus pandemic.
The metal's August futures contract rose 0.4% to settle at $1,897.50 per ounce, according to data from the CME Group. This also marked gold's sixth straight day of gains. Gold also notched a seven-week winning streak.
Tensions between China and the U.S. rose this week. Overnight, China ordered the U.S. to close its Chengdu-based consulate. Earlier this week, the U.S. had a Houston-based Chinese consulate closed.
"US-China tensions continue to escalate, which prompted a risk-off move in markets on Thursday and Friday," Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. He pointed out gold is also one of the best-performing assets this year, rising more than 24%. He also said political uncertainty is likely to persist throughout the year, which he forecast could lift gold to $2,000 per ounce.
Haefele also pointed out the move higher in gold comes as the U.S. dollar has fallen sharply recently. The dollar index — which measures the greenback's performance against six other currencies — is down more than 1% this week and has fallen for five straight weeks.
"While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar," he said.
Gold's gains also come as the coronavirus pandemic continues to ravage the global economy. Data compiled by Johns Hopkins University showed more than 15 million coronavirus cases have been confirmed globally.
In the U.S. alone, over 4 million infections have been reported along with at least 144,552 deaths. Several states and countries have had to postpone or roll back reopening plans as cases keep rising.
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