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Gold finally surpassed $2,200 an ounce for the first time on Thursday after the US Federal Reserve indicated that it would press ahead with three rate cuts in 2024 despite elevated inflation.

Spot gold set a new record of $2,222.39 during the early hours of trading, before retreating to $2,206.10 by 9:05 a.m. EDT for a 1.0% gain. US gold futures soared 2.4% to $2,208.20.

Gold’s latest rally, which started mid-February, is underpinned by longstanding tailwinds including heightened geopolitical risks and increased central bank buying. This month alone, the safe-haven metal hit new highs on five occasions.

Its rapid ascent, according to Bloomberg columnists, has surprised many seasoned market observers, as there hasn’t been a clear catalyst. What has been partially driving bullion are expectations for looser monetary policy in the US, and that has now been reaffirmed by the Fed.

On Wednesday, Fed chair Jerome Powell continued to highlight officials would like to see more evidence that prices are coming down, but “it’s still likely in most people’s view that we will achieve that confidence and there will be rate cuts,” he said.

“What we saw last night was the green light really for gold traders to come back in,” said Chris Weston, head of research for Pepperstone Group.

“The Fed have said that right now they’re tolerant of the inflation that we’ve seen, they’re tolerant that the labour market strength is not going to be the impediment,” Weston told Bloomberg.

Speculation around the timing of the Fed’s long-anticipated pivot may have provided the trigger for recent gains, with data showing that traders boosted their net long positions on gold in the week through March 5 by the most since 2019.

The metal stands to benefit even more when US interest rates actually do come down, as bullion-backed exchange traded funds look likely to increase their holdings, according to UBS Group.

On the geopolitical front, there are a number of risks boosting gold’s allure as a haven asset: Russia appears to be gaining the upper hand in its war in Ukraine, the Israel-Hamas conflict continues unabated and has led to a re-routing of global shipping, while the US presidential election at later this year could prove massively consequential for markets.

Chinese buying has also underpinned prices. As well as the central bank, people have been stocking up on coins, gold bars and jewellery to safeguard their wealth from a years long property downturn and losses in the country’s stock market.