London CNN Business  — 

Gold prices have soared to a record high, with investors rushing to find safe places to park their money as concerns grow about a resurgence in the coronavirus and the impact that could have on the global economy.

Gold hit $1,944 per ounce earlier on Monday, beating its previous record of $1,921 set in 2011. It has now gained about 27% so far this year. Silver also got a boost, climbing more than 6% to reach $24.21 an ounce, eclipsing Thursday’s seven-year high.

“Gold is the clear beneficiary of safe haven demand,” Stephen Innes, chief global markets strategist at AxiCorp, said in a research note. And the record run may not be over yet. Analysts at UBS expect gold to reach $2,000 before the end of the year, driven higher by low US interest rates, a weaker dollar and tension between the United States and China.

The main driver behind gold’s rally has been falling returns on US government bonds, which reflect the likelihood that the Federal Reserve will have to keep interest rates lower for a prolonged period of time to support the economic recovery, according to Hussein Sayed, chief market strategist at FXTM. That has also served to weaken the US dollar, which is trading at a 22-month low of 0.85 euros and a 4-month low against the Japanese yen.

“That’s partly driven by a sense that the US is having a harder time controlling the virus than others, which will see the US economy under-perform,” said Kit Juckes, chief strategist at Societe Generale.

There is mounting evidence that America’s fragile economic recovery is already stalling, as the number of coronavirus infections and deaths spike. Jobless claims are rising again for the first time in months and there are worries that the expiration of Washington’s $600 boost to unemployment benefits, set to end on Friday, will deal another blow to consumer spending.

Austan Goolsbee, who chaired President Barack Obama’s Council of Economic Advisers in the aftermath of the 2008 financial crisis, told CNN Business that the United States could be in for another financial meltdown if the pandemic isn’t quickly brought under control.

“Whoever is coming in there in January 2021 might be facing worse conditions than in 2009, as hard as that is to believe,” Goolsbee said, referring to the upcoming presidential election.

Worrying signs in Europe, too

Elsewhere, sentiment remains fragile following a spike in coronavirus cases in Spain, which prompted the UK government to impose a 14-day quarantine on all people returning from the country. Investors fear that the restrictions could spread, delaying the economic recovery.

The spike has already impacted flight bookings, according to Ryanair (RYAAY) CEO Michael O’Leary. Europe’s biggest low cost airline now expects to carry 60% fewer passengers over the 12 months to April 2021, compared with the previous year. “That will be entirely contingent on there being no second wave of Covid-19 in the [fall] and winter,” O’Leary said on Monday.

In a new report published Monday, EY economists forecast that UK GDP will contract 11.5% in 2020, compared with the 8% drop they were expecting in June. A second coronavirus wave and the failure of post-Brexit trade talks with the EU would make matters even worse.

“The UK economy may be past its low point but it is looking increasingly likely that the climb back is going to be a lot longer than expected,” noted Howard Archer, EY’s chief economic adviser.

— Matt Egan and Julia Horowitz contributed reporting.