Despite US economic data worrying investors over a potential economic slowdown, gold paired some of its robust gains on Thursday, but was still on course for a weekly gain.

Spot gold fell 0.6% to $2,009.07 per ounce as of 2:53 p.m. EDT (18:53 GMT), as gold futures for a June delivery fell 0.5% to settle at $2,026.40.

So far this week, bullion is up over 2%, rising above the $2,000 level, as oil surged following the surprise announcement of production cuts by OPEC+. The rally comes just before a key US jobs report, as data shows a slower US services sector and fewer job openings.

Paul Wong, market strategist at Sprott noted that the US Federal Reserve has a conundrum, since if they raise interest rates, they could worsen the banking crisis or trigger a recession. However if they pause rate hikes, inflation could become embedded. He noted, either scenario would prove beneficial for gold.

He concluded, “It is a long weekend for most major markets, so I would expect low volume, not meaningful price action today.”

Also this week, Treasury yields hitting a seven month trough, and the dollar index hovering around two-month lows have supported prices of the precious metal.

Although gold is often perceived as an inflation hedge, lower rates decrease the opportunity costs of holding bullion instead acquiring a yield-producing asset.

St. Louis Fed President James Bullard noted that he felt the Fed should continue to raise rates to combat inflation, due to the continuing strength of the labor market. However if more data emerges supporting rate cuts, Craig Erlam, senior market analyst at OANDA noted that it “could keep gold above $2,000 and perhaps propel it into uncharted territory.”

The jobs report on Friday should offer more clues as to which way the Federal Reserve is likely to take monetary policy, and which direction gold will take.