Gold prices reached a new all-time high in early trading Tuesday, but extrapolating the reason behind the surge may not center on anything more than old-fashioned monetary policy.

The price for spot gold rose as high as $2,141 per troy ounce. It has surged roughly 5.6% in the past month and 16% in the past year. Gold demand has remained solid through the end of last year as central banks continued buying it up as an inflation hedge.

Recent economic data may have buoyed investors' hopes that global central banks will cut rates en masse this year, boosting gold prices in the process.

What's The Fed Got To Do With Gold?

Investors generally consider gold a safe haven in times of economic uncertainty. But the precious metal offers no investment yield, making it less attractive when interest rates rise and higher yields can be found on bonds and other assets. However, investors have increasingly anticipated interest-rate cuts by global central banks for the past year as economic growth has cooled.

That anticipation increased this week. Almost 70% of U.S. investors now expect the Federal Reserve to begin cutting interest rates in June, up from 58% just a week ago, according to the CME Groups' FedWatch Tool that forecasts rate movements based on fed funds futures trading data.

Moderating inflation has raised hopes for rate cuts despite looming election uncertainty.

In a research note, Citi said that uncertainty could continue providing support for gold prices. Moreover, analysts at Berenberg said a potential victory by Donald Trump in the U.S. presidential election would boost gold's prospects.

Still, analysts with ING said the Fed's policy remains the biggest key for gold prices in coming months—meaning prices may continue following investors' short-term rate cut expectations.