Gold prices rose to a record high on Monday, as a softer US inflation reading cemented bets that the Federal Reserve would deliver its first interest rate cut of the year in June.

Spot gold was up 1.2% at $2,258.53 per ounce, as of 0815 GMT, after hitting an all-time high of $2,262.19 earlier in the session. US gold futures gained 1.8% to $2,279.50.

“The absence of any upside surprises in the core PCE price index release may have provided further go-ahead for gold prices to push into new record territory,” said IG market strategist Yeap Jun Rong, referring to the personal consumption expenditures (PCE) price index report.

The core reading now at its lowest level in almost two years potentially offers some validation for the Fed to kick-start its rate-cutting process sooner rather than later, Jun Rong said.

The latest US inflation data is “along the lines of what we would like to see,” Fed Chair Jerome Powell said on Friday.

US prices moderated in February, with the PCE price index rising 0.3%, data showed. Traders are currently pricing in a 69% probability that the Fed would begin cutting rates in June, according to the CME Group’s FedWatch Tool.

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Lower interest rates reduce the opportunity cost of holding bullion.

Gold logged its biggest monthly rise in more than three years in March after a blistering rally fuelled by rate-cut bets, strong safe-haven demand and central bank buying.

“Today’s price action is happening in a very low liquidity environment – most European and many APAC markets are still closed for Easter Monday. So, it would not be surprising to see these moves reverse when participation rebuilds later in the week,” said Ilya Spivak, head of global macro at Tastylive.

Spot silver rose 0.7% to $25.15 per ounce, platinum was up 0.2% at $909.76 and palladium climbed 0.9% to $1,023.95.