Gold hit a new record high on Wednesday amid expectations that the money printing policies by major economies would drive inflation higher and on fears of a second wave of Covid-19 pandemic.

The intraday gold prices recorded the highest level ever today at $2039.90 an ounce, extending gains for a second consecutive session, after the breach of the psychological level of $2,000 per ounce.

The U.S. Congress is looking forward to reaching a deal on a new rescue package by the end of the week, amid pressure from lawmakers to provide more help to the U.S. economy to overcome the repercussions of the Covid-19 spread.

The generous spending schemes announced by major economies to counter the impact of the lockdowns have been pushing gold prices up as investors seek safety against inflation.

Meanwhile, yields on government bonds are at record low, with some of them providing negative returns, which makes bullions a better refuge and investment.

On the other hand, still there are fears of a second coronavirus wave, as the new infections have recently started to increase, which would prompt governments to impose new restrictions.

While there is a general improvement in economic data in major economies, a second wave of coronavirus would offset this progress and may propel policymakers to launch new stimulus packages.

Mainly, tensions in financial markets result in higher demand on safe havens, led by gold, which also took advantage of the drop in the U.S. dollar.

In September, 2011, gold set a new zenith at $1920.80, following consistent haven demand after the global financial crisis and the European debt calamity.

Additionally, rising tensions between the US and China have provided more support to gold, as President Donald Trump is obliging TikTok to sell its US operations.

A fact that cannot be ignored is that the weak dollar is one of the key drivers to gold, as it boosts demand on the precious metal as an alternative investment.

The dollar index, which measures the performance of the federal currency against a basket of major currencies, slipped to a low of 92.97, hovering near its lowest level since May 2018.

The dollar index experienced its worst monthly decline since September 2010 in July, falling 4.1 percent, while currently heading for its seventh straight weekly plunge.

Silver took the same foot prints of gold, jumping more than 2.5 percent to a new record high at $26.77 an ounce.