Gold hit new highs on Tuesday as investors continue to bet that major central banks will start cutting interest rates this year.
On Tuesday morning gold futures (GC=F) reached a high of $2,150.50 after April contracts settled at a record $2,126.30 per ounce in the prior session.
Tuesday's intraday spot gold touched a record of $2,141.79 per ounce before paring back gains.
The precious metal is considered a safe haven during times of geopolitical tensions and when interest rates decrease. While the timing of the first Fed rate cut is uncertain, investors expect the Federal Reserve to begin cutting rates in June, while Europe is also expected to do the same this year.
"We've got a perfect storm brewing in the gold market," Phillip Streible, chief market strategist at Blue Line Futures, told Yahoo Finance on Tuesday, noting prices have risen by about $150 since mid-February.
The possibility of more regional bank turmoil following New York Community Bankcorp's woes has also helped lift prices in the past several sessions amid expectations that Fed officials will swoop in to save the sector, says Streible.
"If you do have some kind of bank failure, some kind of regional bank risk, you’re going to see it pull forward those [rate] cut expectations by the Fed, and they’ll end up making those cuts a little bit sooner," he said.
One potential wrench that could delay a further rally would be if Friday's jobs report comes in hotter than expected, making a case for Fed officials to push back expected rate cuts.
Bullion's price increases have been disconnected from recent outflows seen in gold-related ETFs. Strategists believe investors have been rotating money into bitcoin ETFs as the token has roared toward new highs.
“We’re seeing that rotation out of gold and into bitcoin, which is attracting about $1 billion per week in the ETF inflows,” said Streible.
Central banks have been buying up gold at historic levels, helping drive up demand over the past couple of years.
Adjusted for inflation, gold hit a record in 1980 when it hit $850 per ounce, which would equal almost $3,200 in today's dollars.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.