Gold stormed to a record high on Monday as investors sought refuge from the possible hit to a pandemic-stricken global economy from an escalation in the US-China spat, which pummelled the dollar.

Spot gold hit a record high of $1,944.73 per ounce, and rose 1.9% to $1,937.24 by 10:22am. US gold futures gained 1.9% to $1,932.50 per ounce.

Gold’s record rally is moving tantalisingly close to the psychologically key $2,000 level, powered by investors seeking cover from COVID-19’s global economic toll.

Silver also rallied jumping as much as 8% to $24.57, its highest since August 2013.

“The dollar is losing its safe-haven appeal and you’re going to continue to see gold surge as the dollar sinks,” said Edward Moya, senior market analyst at broker OANDA.

The dollar index hit a two-year low on the US-China tensions and concerns about the US economy as COVID-19 infections show no signs of slowing in the world’s largest economy.

Gold has risen 28% so far this year marking a shift from before the pandemic, when the bullion had to compete with other safe havens such as the dollar, especially amid Sino-US tensions, which had limited inflows into gold.

China on Monday took over the premises of the US consulate in the southwestern city of Chengdu in retaliation for Beijing’s ouster last week from its consulate in Houston, Texas.

US Senate Republicans are expected to unveil a $1 trillion coronavirus aid package. Investors will also eye the US Fed’s meeting starting Tuesday, where it could flag another accommodative policy shift.

Non-yielding gold is considered a hedge against inflation and currency debasement, with analysts also pointing to massive inflows into gold-backed exchange traded funds as a driver behind its rally.

US stocks rebounded on Monday as investors shrugged off surging COVID-19 cases and US-China tensions, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports.

Expectations are running low for any major announcements at a two-day Federal Reserve meeting this week, but policymakers are likely to lay the groundwork for more action in September or in the fourth quarter, analysts said.

Investors are also keeping a close watch on progress over the next round of government aid ahead of enhanced unemployment benefits set to expire on Friday. US Senate Republicans on Monday are expected to unveil a $1 trillion coronavirus aid package hammered out with the White House, which will now be negotiated with Democrats.

Apple, Amazon.com, Facebook and Alphabet rose between 1.0% and 1.9%, and were among the top boosts to the S&P 500 and Nasdaq. The four FAANG companies are among the 189 S&P 500 firms expected to report results this week.

Technology, consumer discretionary and materials sectors rose over 1.0% each. Bank stocks , which tend to weaken when the economic outlook darkens, lagged with their 1.4% fall.

At 10:56am, the Dow Jones Industrial Average was up 134.48 points, or 0.51%, at 26,604.37, the S&P 500 was up 20.35 points, or 0.63%, at 3,235.98. The Nasdaq Composite was up 125.71 points, or 1.21%, at 10,488.89.

Investors will get the first glimpse of the second-quarter US GDP report on Thursday, which is likely to show the economy contracted by a record 34.1%.

Moderna jumped 7.6% as it started a US government-backed late-stage trial to assess its COVID-19 vaccine candidate in about 30,000 adults.

Hasbro Inc dropped 6.5% after the toymaker missed quarterly results estimates, hit by production shutdowns due to coronavirus lockdowns.

Walgreens Boots Alliance Inc fell 2.7% on news its Chief Executive Officer Stefano Pessina has decided to step down.

Separately, european shares slipped on Monday with travel Stocks leading the declines after Britain imposed a quarantine on travellers returning from Spain, where cases of the novel coronavirus have surged in the last few weeks.

The pan-European STOXX 600 was down 0.2% but came off early lows. Travel & leisure dropped 2.9%, with UK-based airlines and tour operators such as TUI AG , Easyjet Plc, British Airways-owner IAG SA falling between 9.4% and 13.4%.

The broader index sank to a two-month low, further cementing its status as the worst performer in Europe this year.

Spanish Stocks fell 1.3%, while the Irish Stocks benchmark dropped 1.1% after airline Ryanair cut its annual passenger target by a quarter and warned a second wave of COVID-19 infections could lower that further.

Lufthansa and Air France fell 6.4% and 4.0%, respectively, after the British government said it was watching the situation in Germany and France closely. Germany’s DAX was among the few gainers, helped by a 3.4% gain for software group SAP SE after it announced plans to spin off and float Qualtrics, the US specialist in measuring online customer sentiment.

Markets also recouped some losses after the Ifo Institute’s survey showed German business morale improved further in July after posting a record increase in June, suggesting that firms expect Europe’s largest economy to recover from the coronavirus shock if a second wave of infections is avoided.

Oil prices dropped nearly 2% on Monday. Brent crude lost 81 cents, or 1.9%, to $42.53 a barrel by 11:13am, while US West Texas Intermediate (WTI) crude fell 65 cents, or 1.6%, to $40.64 a barrel.

Agencies