(Bloomberg) -- Gold advanced after US economic data supported the case for the Federal Reserve to continue cutting interest rates this year.

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The latest data showed producer prices in the US unexpectedly declined by the most in five years. Separate data showed retail sales barely rose. Treasury yields fell, and swaps trader increased their bets on further Fed cuts, a boon for non-interest bearing gold.

Gold is still more than $250 behind its all-time peak set last month, after losing haven support as ebbing trade tensions between the US and China stoked risk-on sentiment.

Gold largely shrugged off comments from President Donald Trump, who said the US was closer to an agreement with Iran to curb the Islamic Republic’s nuclear program. An easing of geopolitical tensions sometimes leads to downward pressure on the safe-haven asset.

There could be further unwinding of long positions in gold, said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp. While some support should come in around $3,050-$3,150 an ounce, “gold may risk a deeper pullback towards $2,950 levels,” if the support breaks, he said.

Gold is still up by more than 22% this year, fueled by a rebound in demand for bullion-backed ETF products, strong central bank buying and speculative Chinese demand. Investors had feared trade tensions stemming from Trump’s tariffs could spur faster inflation and a slowdown in growth, or even a recession.

Spot gold rose 1.5% to $3,224.54 an ounce as of 3 p.m. in New York. The Bloomberg Dollar Spot Index fell 0.2%. Silver, palladium and platinum all gained.

--With assistance from Sybilla Gross and Yvonne Yue Li.

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