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Gold prices edged higher on Wednesday to touch their highest levels since March 2022 after weak U.S. economic data spurred safe-haven demand and expectations that the Federal Reserve might loosen its monetary policy trajectory.

Spot gold was up 0.1% at $2,022.09 per ounce, as of 0355 GMT. Earlier in the session, bullion was closing in on record highs seen in 2020. U.S. gold futures were steady at $2,038.90.

The dollar index hovered near two-month lows, making bullion cheaper for buyers holding other currencies. [USD/]

"Gold could continue to tear to the upside," given a slowing global economy with high inflation, with the weakness in the U.S. dollar allowing gold to "leap higher," said Clifford Bennett, chief economist at ACY Securities.

Gold prices rallied 2% to cross $2,000 per ounce on Tuesday after another round of weaker U.S. economic data pointed to a slowing economy.

Data showed U.S. job openings in February dropped to the lowest level in nearly two years, suggesting the labour market was cooling. A separate report showed new orders for U.S.-manufactured goods fell for a second straight month in February.

Gold is traditionally considered a hedge against inflation and economic uncertainties, but higher interest rates dim the appeal for non-yielding bullion.

Metals firm MKS PAMP, in a note, flagged a higher risk of future bank failures and weaker economic activity as credit availability and financial conditions tighten amidst a sticky inflation backdrop, which are "positive gold drivers".

The Fed is seen done raising interest rates and starting to cut them in the summer.

But Federal Reserve Bank of Cleveland President Loretta Mester said while the economy appears on a path toward slowing down, the U.S. central bank likely has more rate hikes ahead of it.

Spot silver edged up 0.1% to $25.03 per ounce, while platinum gained 0.5% to $1,022.58 and palladium rose 0.3% to $1,461.42.

Trade was thinned by holidays in China and Hong Kong.