Gold has gone over $1,500-an-ounce for the first time as investors focus on safer investments amid concerns over the economy.
The metal broke through the barrier after the debt downgrade warning for America was issued on Monday, with Standard & Poor's (S&P) slashing its outlook on US government debt to negative from stable.
After the news was announced many shares tumbled, with silver prices also reaching a 31-year high as investors searched for safety.
The move adds to ongoing fears over Europe's sovereign debt crisis and rising global inflation, and it is thought the news could be of interest to people with savings and investments.
The US dollar has also been under pressure since the S&P blow, further fuelling the rise in gold prices.
The record gold price helped mining stocks leap ahead on the London market, with shares in firms such as Rio Tinto and Anglo American as much as 3% higher.
The traditional safe haven has soared in value in recent years as investors are spooked by economic uncertainty.
Gold eased back at the start of the year after a run of positive economic data, but has since bounced back due to gloomy global developments.
The US debt outlook downgrade compounded concerns following political tensions in the Middle East and North Africa, Japan's crisis and more eurozone woes.
Ireland's rating was slashed to just above junk status last week by Moody's, while Portugal is edging closer to a bailout.
S&P said on making its debt warning, there was a "material risk that US policymakers might not reach an agreement on how to address medium and long-term budgetary challenges by 2013".
US Treasury Secretary Tim Geithner was quick to play down the caution, saying the US would keep its triple A rating.
However, some experts believe that with the world's biggest economy under pressure to cut its debt, the gold rally could see prices hit $2,000 an ounce.
