Investors sought safety on coronavirus pandemic worries, driving gold prices above $1,800 an ounce for the first time since 2011 in international and local markets.
Adding to the economic worries, US Fed officials expressed concern that the surge threatened to pinch consumer spending and job gains.
The European Commission also forecast the eurozone would drop deeper into recession this year.
However, in the medium to longer-term, an improvement in the economic backdrop could weigh on gold, Julius Baer analyst Carsten Menke said in a note, pointing out that safe-haven demand has been the strongest in countries hit the hardest, such as the US and the UK.
Mirroring appeal for the metal, prices of which have rallied over 18 per cent so far this year, gold-backed exchange traded funds added 104 ton of bullion worth $5.6 billion in June, the World Gold Council said on Tuesday.
“The health, financial and economic uncertainties generated by the Covid-19 pandemic and its aftermath are likely to continue to support gold’s rally well into 2021, but at a reduced level,” HSBC analysts said in a note.
-- With Reuters