While fear and uncertainty are pervasive across the world’s financial markets, there is one asset that continues to get lots of conviction: gold. The precious metal has hit another record, with the spot price moving above $1,700 an ounce. It’s further evidence that gold is a viable safe haven as well as a currency alternative.

The SPDR Gold Shares (NYSE:GLD) exchange-traded fund was recently up 2.5% to $165.80.

The latest catalyst has been Standard & Poor’s downgrade of U.S. debt, and keep in mind that Bank of America believes there may be another downgrade by November because of the continuing political instability. After all, will a committee really solve the federal budget woes?

At the same time, there was some harsh rhetoric from Chinese officials. The message: the U.S. can no longer borrow huge amounts and must get serious about cutting back.

Of course, China has more than $3 trillion in reserves and is the biggest holder of U.S. Treasurys, at about $1.2 trillion. In other words, China is much more powerful than S&P.

It appears China is accumulating more gold, and this has been the case with other foreign central banks, like South Korea, Russia, Mexico and Thailand. As should be no surprise, the world is getting more skeptical about the dollar’s role as the reserve currency.

But the fact is that China’s role will be critical. Only 1.6% of its total reserves are in gold, so a lot of room exists to fuel demand.

Does that mean it’s time to rush into gold? No asset goes straight up, and there will inevitably be some type of correction in gold. This is the sentiment of some of the world’s best investors, like Jim Rogers.

But looking to the long term, there are still some powerful tailwinds for gold. Buying the metal on pullbacks looks like a good idea.

Tom Taulli is the author of various books, including “All About Commodities” and “All About Short Selling.”  You can find him at Twitter account @ttaulli.  He does not own a position in any of the stocks named here.