(Bloomberg) -- Gold rose to a record, buoyed by softening US economic data and commentary by Federal Reserve officials that’s created expectations for rate cuts early next year.

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The precious metal rose as much as 3.1% to $2,135.02 an ounce in early trading on Monday. That surpassed the all-time high it set on Aug. 7, 2020, in the midst of the pandemic.

Fed Chair Jerome Powell attempted to push back against investors’ growing expectations of interest-rate cuts in the first half of 2024, but Wall Street responded by doubling down on Friday, despite his warning that “it would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.” Swaps markets are now pricing in a cut in May. Bullion futures on the Comex hit a fresh record after Powell’s comments.

Gold has rebounded sharply from a slump in late September, when it came under pressure due to expectations for higher long-term interest rates, which are negative for the non-interest bearing metal. Prices started to rally after the start of the Israel-Hamas conflict in early October spurred a wave of haven buying.

Bullion has since been bolstered by a decline in the dollar and US Treasury yields as US data pointed to a cooling economy — cementing expectations for a quick shift to rate cuts by the Fed next year.

Gold is still trading at a large premium to models of its price based on its historic relationship with the greenback and Treasuries. That dynamic has persisted for most of the past year, driven by record buying by central banks, which helped prices to weather persistent outflows by gold-backed exchange traded funds.



However, ETF holdings have shown signs of stabilizing in recent weeks, which has helped ease the selling pressure on the metal.

Gold rose 3% to $2,135.02 an ounce as of 7:53 a.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.1%. Silver and platinum climbed, while palladium dropped.

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