Gold rises on dollar weakness

Gold nudged higher on Monday, supported by a softer dollar as traders grew more confident the US Federal Reserve will deliver an interest rate cut at its policy meeting this week.

Spot gold rose 0.3 percent to $4,207.99 per ounce as of 0530 GMT. US gold futures for December delivery eased 0.1 percent to $4,237.0 per ounce.

The US dollar edged lower to hover near the one-month lows touched on December 4, making greenback-priced gold cheaper for overseas buyers.

"Core PCE data came and went without incident, which leaves the Fed on track to cut rates this week, with this expectation of looser monetary conditions driving gold to the upside," KCM Trade Chief Market Analyst Tim Waterer said.

"The anticipated rate cut this week is keeping the dollar in check, while simultaneously giving the gold price some room to move northwards."

US consumer spending rose moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lacklustre labour market and rising cost of living curbed demand.

This followed private payroll data, which showed the sharpest decline in more than two-and-a-half years last month.

Dovish commentary from several Fed officials has further fuelled expectations of monetary easing.

CME's FedWatch tool shows markets pricing in roughly an 88 percent chance of a 25-basis-point rate cut at the Fed's meeting this week.

Lower interest rates tend to favour non-yielding assets such as gold.

Silver slipped 0.4 percent to $58.05 per ounce, after hitting a fresh record high of $59.32 on Friday. Year-to-date, the metal has surged more than 100 percent.

Silver is widely seen as still undervalued relative to gold, and its 2025 rally reflects both growing industrial appetite and expectations that demand will continue to outpace supply through 2026, Waterer said.