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Gold price soars past $1,700 as wary investors look for safe bet

The price of gold streaked past $1,700 an ounce for the first time Monday. Anxious investors sought safety in the metal as stocks tumbled around the world after the U.S. lost its AAA credit rating.

Gold's allure stems in part from fears that the world's major economies are dangerously indebted. Its value, unlike that of a currency, doesn't hinge on whether countries can make their bond payments.

Standard & Poor's on Friday cut the long-term credit rating for the U.S. by one notch to AA , deepening investor fears about a weakening U.S. economy. The move may have been expected, but economists say its impact is still unclear, and the downgrade could hurt the economy.

"The U.S. and global economy are in a feeble 'rehab' recovery and a trifecta of shocks has hit the economy -- surging oil prices, the Japan disruption and the debt crises in Europe and the U.S.," wrote Ethan Harris, a Bank of America Merrill Lynch economist.

Gold soared $61.40, or 3.7 percent, to settle at $1,713.20 on Monday. It reached a record high of $1,723.40 per ounce during the day.

Still, adjusted for inflation, an ounce of gold remains below its 1980 peak of $850, which translates into about $2,400 in today's dollars.

Investors have turned to gold as the appeal of the dollar -- the world's biggest reserve currency and traditionally a safe bet for investors -- has ebbed. .

Gold's price has nearly doubled since the start of 2009, and its climb accelerated this summer.

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