Gold extended gains on Tuesday and crossed the key $2,000 level as the dollar and yields fell, while weaker US economic data emboldened bets for slower interest rate hikes despite mounting concerns over oil-led inflation.

Spot gold climbed 1.9% to $2,021.74 per ounce by 10:48 a.m. EDT after reaching its highest since March 9, 2022 of $2,024.79 earlier. US gold futures gained 2% to $2,040.80.

Tracking gold’s gains, other precious metals also jumped. Silver jumped 3.7% to $24.88 per ounce, platinum gained 2.8% to $1,013.60, while palladium was up 1.2% to $1,477.66.

Burnishing gold’s appeal, especially amongst traders holding other currencies, the dollar added to its losses after data showed US job openings in February dropped to a near two-year low while factory orders also dipped.

“With the weaker than expected economic data, it portends that the Fed will be in fact closer to the end of its interest rate cycle, and we’ve seen yields drop along with the dollar and that continues to foster a higher gold price,” said David Meger, director of metals trading at High Ridge Futures.

Gold eases as traders gauge OPEC+ output cuts, weak US data

A surge in oil prices this week after a surprise output cut by OPEC has helped zero-yield gold, traditionally considered the preferred inflation hedge, shake off the usual pressure from the likelihood of further interest rate that could be implemented to rein in rising price pressures.

Markets now see about a 40% chance of the Federal Reserve hiking rates by a quarter basis point in May, with a roughly 60% chance of a pause.

But Han Tan, chief market analyst at Exinity, said more rate hikes could still cause gold to unwind some of its recent gains.