Gold topped $2,500 an ounce for the first time, bolstered by hopes that the US Federal Reserve is edging closer to cutting interest rates.

Spot bullion climbed as much as 1.8% on Friday, exceeding the previous record set last month, as a disappointing reading on the US housing market reinforced expectations of fast and deeper cuts by the Fed. Lower rates are generally positive for gold as it pays no interest.

The precious metal is up about 20% this year amid mounting optimism on monetary easing and large purchases by central banks. It has also seen increased demand as a haven asset due to rising geopolitical risks, including tensions in the Middle East and Russia’s conflict with Ukraine.

Bullion began shooting higher earlier in the year — surprising seasoned analysts and veterans as there wasn’t always a clear macro catalyst to justify its price rally — and sustained those gains even as traders dialed back bets on the timing of rate cuts. But more recently, gold has ticked higher as US officials are widely expected to start lowering rates soon.