Gold prices advanced on Monday, as the metal’s appeal was boosted by safe-haven demand owing to tensions in the Middle East, while markets raised bets that the Federal Reserve will cut rates as soon as March.

Spot gold was up 0.2% at $2,052.10 per ounce, as of 10:34 a.m. ET (1534 GMT). U.S. gold futures rose 0.2% to $2,056.40, with trading expected to be low due to the Martin Luther King Day holiday.

The war between Israel and Hamas has passed the 100-day mark as Israel continues its fierce offensive, while the Houthi militia’s threat to respond to U.S. air strikes on Yemen kept risks elevated.

Gold tends to perform well during economic turmoil, with reliability that can help offset the risk of more volatile assets in conditions such as geopolitical uncertainty.

“Spot gold is also rising as markets cling on to hopes that the Fed will cut its benchmark rates as early as March,” said Han Tan, chief market analyst at Exinity Group.

“Gold’s window for posting fresh record highs should remain open as long as the Fed can move in line with market expectations,” Tan added.

Bullion hit an all-time high of $2,135.40 on Dec. 4.

Supporting gold, data on Friday showed U.S. producer prices unexpectedly fell in December, sending 10-year Treasury yields lower. [US/]

Traders are now pricing in a 73% chance that the Fed could cut rates in March, according to CME’s Fed watch tool.

Higher interest rates raise the opportunity cost of investing in non-yielding bullion.

In other metals, spot silver was down 0.1% to $23.16 per ounce, platinum climbed 0.6% to $910.92 and palladium lost 0.8% to $968.25.

“Despite gradual shift towards surplus, we believe (palladium) prices may rally modestly this year,” HSBC said in a note.

(Reporting by Anjana Anil in Bengaluru; Editing by Sharon Singleton, Louise Heavens and Andrea Ricci)