By Sumita Layek

(Reuters) - Gold prices rose on Tuesday as the dollar plunged to two-year lows and the U.S. Treasury yields ticked lower, but the metal slipped below the key $2,000 an ounce mark after the S&P 500 touched record highs.

Spot gold rose 0.7% at $1,999.76 per ounce by 11:34 a.m. EDT (1534 GMT), after hitting a one-week peak of $2,014.97. U.S. gold futures were up 0.4% at $2,006.10.

"People are watching the dollar index and its pretty alarming how its breaking down and we're seeing all these hard assets like gold and silver rising up in tandem," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

"We're going to run back up to the all-time highs, we had a healthy correction in the gold market, a lot of people who jumped on the bear side of the market are going to end up reversing course."

The dollar index <.DXY> hit its lowest since May 2018 and the benchmark 10-year U.S. Treasury yield moved lower.

Gold has surged 32% this year, helped by a rush to perceived safety in the metal considered a hedge against inflation and currency debasement.

"We see yield of the real rates falling again, so there is an increase in inflation expectation probably related to the aggressive fiscal stimulus measure," said UBS analyst Giovanni Staunovo.

Capping gold's advance, however, were gains in equities markets with the benchmark S&P 500 hitting record highs last seen before the onset of the coronavirus crisis in February. [.N]

Investors were now awaiting minutes from the Fed's last meeting, due on Wednesday.

Silver climbed 1.4% to $27.78 per ounce after rising as much as 3.8%. Platinum rose 0.6% to $955.03 per ounce, while palladium eased 0.6% to $2,185.71.

(Reporting by Sumita Layek and Eileen Soreng in Bengaluru; Editing by Marguerita Choy)