(Bloomberg) -- Gold extended gains to bring it within touching distance of an all-time high, as speculation over a Federal Reserve pivot and geopolitical risks underpinned the precious metal’s rally.

Bullion jumped as much as 0.8% to $2,130.96 an ounce, just shy of the record $2,135.39 set on Dec. 4 last year. 

Gold has added almost $100 in the past five sessions, fueled by a combination of expectations for monetary easing, geopolitical tensions and the risk of a pullback in equity markets. The scale of the recent move has surprised some market watchers, who say it may be partially driven by momentum.

The rising risk of a stock market correction — flagged by weak US manufacturing data on Friday — may have persuaded some investors to move out of equities and into gold, said Ole Hansen, commodity strategist at Saxo Bank A/S. 

While the timing of the Fed’s pivot remains uncertain, signs that it’s getting closer have supported gold since mid-February. Swaps markets show an almost 60% chance of a rate cut in June, a higher probability than early last month. Lower borrowing costs are typically positive for the precious metal, which doesn’t offer any interest.

That uncertainty has prompted some analysts to question the sustainability of gold’s recent sharp advance.

“We think the rally is fragile,” said Thu Lan Nguyen, head of commodity research at Commerzbank AG. “We would not be surprised to see a small downward correction in the coming days on the back of profit taking.”

The recently rally has also highlighted the increasing disconnect between spot prices and outflows from bullion-backed exchange traded funds. Holdings in SPDR Gold Shares, the world’s largest such ETF, fell by 0.3% on Monday, taking the total to the lowest level since July 2019, according to data compiled by Bloomberg.

Those outflows have partly been offset by persistent central bank demand for the precious metal, which helped keep prices elevated even as real interest rates spiked last year. Bullion was also supported over the Lunar New Year, as Chinese consumers sought a hedge against turmoil the country’s stock market and property sector. 

In the first months of this year, gold’s role as a haven asset is being underlined by elevated geopolitical risks, with attacks on shipping in the Red Sea showing escalating Middle East tensions. China’s economic woes and the US presidential election at the end of the year make it a potentially volatile mix.

Still, bullion has further to go to reach its inflation-adjusted peaks set more than a decade ago. Gold has risen more than 600% since the turn of the millennium, though adjusted for inflation it remains below the high of $850 touched in January 1980, which would be equivalent to more than $3,000 in today’s dollars.

Spot gold was trading 0.8% higher at $2,130.75 an ounce as of 1:27 p.m. in London. The Bloomberg Dollar Spot Index rose 0.1%. Silver was little changed, while platinum and palladium edged lower.

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