(Bloomberg) — Gold jumped above $2,200 an ounce for the first time after the Federal Reserve maintained its outlook for three rate cuts this year, suggesting it isn’t alarmed by a recent uptick in inflation.

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Bullion advanced to a record in early trading, before paring gains. It’s surged since mid-February, underpinned by long-standing supports including heightened geopolitical risks and buying by central banks, led by China. The rapid ascent has surprised many seasoned market observers, however, as there hasn’t been a clear catalyst.

The rally has been partially driven by expectations for looser monetary policy in the US, and that was reaffirmed by the Fed on Wednesday. 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 Ltd. “The Fed have said that right now they’re tolerant of the inflation that we’ve seen, they’re tolerant that the labor market strength is not going to be the impediment.”

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 last week 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 AG.

Read More: Chinese Buying Set the Stage for Gold’s Latest Record Run

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 the end of the year could prove massively consequential for markets.

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

Spot gold rose 0.7% to $2,201.94 an ounce as of 9:40 a.m. in Singapore. The Bloomberg Dollar Spot Index declined 0.2%. Silver, platinum and palladium were all higher.

–With assistance from Jack Ryan.

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