Gold prices nudged upward in Asian trade on Monday, buoyed by a softer U.S. dollar that remained close to a five-week low. Expectations that the Federal Reserve will move ahead with an interest-rate cut this week continued to underpin sentiment, though lingering caution kept gains limited.

Spot gold was up 0.3% at $4,208.55 an ounce by 03:28 ET (08:28 GMT), while February U.S. gold futures dipped 0.3% to $4,2371.10.

Softer dollar boosts bullion but upside capped by caution

With the dollar on the back foot, gold became more appealing to international buyers, as a weaker greenback effectively reduces bullion’s cost in global markets.

The currency’s slide reflects a growing conviction that the Fed will lower rates at its Dec. 9–10 meeting. That view strengthened after a stretch of softer data and Friday’s delayed core PCE print — the Fed’s preferred inflation gauge — revealed subdued monthly and annual price pressures.

Recent economic indicators, including weaker private hiring and signs of cooling in the broader labor market, have reinforced expectations that the Fed is prepared to start easing.
Lower interest rates generally enhance gold’s attractiveness by reducing the opportunity cost of holding non-yielding assets.

Even so, gold’s advance was restrained as Treasury yields continued to edge higher, offsetting part of the benefit of the weaker dollar. Mixed messaging from Fed officials has also injected a degree of uncertainty, with some policymakers warning against cutting rates too soon. That divergence has kept traders wary of a potentially less-dovish stance on Wednesday.

Market participants now await the Fed’s decision and Chair Jerome Powell’s remarks for a clearer signal on the policy trajectory.

Broader metals market quiet ahead of central bank cues

Trading was subdued across other precious and industrial metals as investors largely stayed on the sidelines.

Silver futures slipped 0.6% to $58.708 per ounce, and platinum futures eased 0.3% to $1,663.60 per ounce.

Copper saw mixed moves: benchmark LME copper inched up 0.3% to $11,681.20 a ton, while U.S. copper futures retreated 0.7% to $4.67 a pound.

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