In global markets, gold prices hit a new high by rising above the important $2,000 mark. A weaker dollar, expectations of more stimulus and rising coronavirus cases boosted the safe-haven demand of gold.

Spot gold was up 0.2% at $2,022.42 per ounce after rising above $2,030 in early session. US gold futures rose 0.9% to $2,039. Among other precious metals, silver fell 0.5% to $24.88 per ounce while platinum dropped 0.9% to $928.95.

This year, gold prices have surged 33% in global markets, also benefiting from record inflows into gold-backed exchange traded fund or gold ETFs. Unprecedented stimulus from central banks have brought down the interest rates, which has benefited non-yielding gold. Further supporting gold, the five-year U.S. Treasury yield on Tuesday hit a record low, while the benchmark 10-year Treasury yield fell to a five-month low.

Gold tends to benefit from widespread stimulus measures from central banks because it is widely viewed as a hedge against inflation and currency debasement.

“Though gold has turned choppy amid mixed factors, the general momentum is still positive given the challenges to global economy and strong investor interest,” Kotak Securities said in a note.

“Gold continues to be supported by safe haven buying amid increasing challenges to global economy in form of rising virus cases and increased US-China tensions. Coronavirus cases have been rising globally and this has forced countries to reimpose restrictions hampering economic activity,” it added.

In the US, lawmakers have declared more progress towards a sweeping coronovirus relief bill and are hopeful of reaching a deal by the end of this week.

The dollar index today fell 0.3% against its rivals, making gold less expensive for holders of other currencies.

Meanwhile, holdings of SPDR Gold Trust, the world’s biggest gold-backed ETF, rose 0.8% to 1,257.73 tonnes today. (With Agency Inputs)