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Gold prices rose to a fresh record high on Tuesday as demand from momentum-following funds offset a strong U.S. dollar and the possibility of higher-for-longer U.S. rates.

Spot gold rose 0.3% to $2,258.5022 per ounce, after hitting an all-time high of $2,266.59. The bullion has been hitting fresh record highs for three sessions in a row.

“An underlying bid from retail and central banks is being joined by momentum-following speculators who have extended their already elevated longs following the break above $2,200,” said Ole Hansen at Saxo Bank.

“In addition, there is no doubt that geopolitical tensions have added an additional layer of support.”

The bullion rose by 9.3% in March, which was its biggest monthly growth since July 2020.

It kept rising on Tuesday despite a strong U.S. dollar after Monday’s data showed U.S. manufacturing grew for the first time in 1-1/2 years in March. Traders pared bets of a June interest rate cut to 62% after the data, according to the CME Group’s FedWatch Tool.

“What makes the gold rally so unusual is that is occurring despite significant traditional headwinds with the U.S. dollar rising, treasury yields rising, the likelihood of higher for longer U.S. rates increasing,” said independent analyst Ross Norman.

“Furthermore, we are moving into a slack period for seasonal demand. You could not imagine a more inauspicious backdrop.”

Amid high prices, European physical investors are selling metal wholesale back to their dealers and Indian demand has cratered, he added.

Meanwhile, support from gold extended to other precious metals.

Spot silver rose 1.5% to $25.4544 per ounce, platinum added 1.4% to $914.382 and palladium climbed 1.5% to $1,010.8962.

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