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Gold prices moved slightly higher in Asian trading on Monday, supported by a softer U.S. dollar trading near a five-week low and firm expectations that the Federal Reserve will cut interest rates at its meeting later this week.
Sentiment was influenced by a series of weaker economic indicators and Friday’s inflation figures, which strengthened the case for imminent policy easing — though lingering caution kept gains in bullion relatively limited.
Spot gold rose 0.3% to $4,208.55 an ounce by 03:28 ET (08:28 GMT), while February Gold Futures slipped 0.3% to $4,237.10.
Fed Easing Bets Support Gold, but Upside Remains Capped
Gold found support as the U.S. dollar weakened, improving the metal’s appeal for international buyers.
The dollar’s pullback has largely stemmed from rising confidence that the Fed will deliver a 25-basis-point rate cut at its December 9–10 meeting. Traders have grown increasingly convinced of this outcome following signs of:
- Slowing labor-market momentum
- Soft private-sector payrolls
- Cooling inflation pressures
The delayed core PCE index — the Fed’s preferred inflation gauge — showed only a mild monthly increase, with the annual rate continuing to drift lower, reinforcing expectations for easier monetary policy.
Lower interest rates tend to make non-yielding assets such as gold more attractive, while a weaker dollar boosts global demand by lowering the metal’s cost in other currencies.
Investor Caution Ahead of Fed Decision
Despite supportive fundamentals, gold’s gains remained subdued. U.S. Treasury yields have edged higher in recent sessions, limiting some of the metal’s upside.
Additionally, mixed messaging from Federal Reserve officials in recent weeks has created uncertainty. While some policymakers support easing due to slowing economic momentum, others warn against acting too quickly.
This divergence has raised the risk of a surprise stance at this week’s policy meeting, keeping investors cautious ahead of Chair Jerome Powell’s remarks.
Metal Markets Mixed
Other precious and industrial metals traded in narrow ranges:
- Silver Futures fell 0.6% to $58.708/oz
- Platinum Futures eased 0.3% to $1,663.60/oz
- LME Copper Futures rose 0.3% to $11,681.20/ton
- U.S. Copper Futures slipped 0.7% to $4.67/lb
