Gold held steady for a second day, as investors weighed the outlook for U.S. interest rates after inflation data that supported the case for a rate cut next month.

Bullion traded near $2,635 an ounce, with pressure on the metal easing as the U.S. dollar rally lost steam. The U.S. dollar, which gained after President-elect Donald Trump's victory, has weakened this week against other currencies amid month-end flows. A stronger dollar makes the metal more expensive for many buyers.

Traders also weighed Wednesday's core personal consumption expenditures price index — the Federal Reserve's preferred measure of underlying inflation — which rose in line with expectations. Investors are pricing in a 60% chance of a quarter-point cut next month, up from about the same chance earlier this week. Lower borrowing costs typically benefit gold, as it doesn't pay interest. The print came after the release of the Fed's November meeting minutes, where policymakers expressed confidence in the economy and easing inflation.

They indicated broad support for a cautious approach to future rate cuts. The bullion market was relatively calm after Monday's 3.4% slump, which came amid news that Israel and the Lebanese militant group Hezbollah were preparing a 60-day suspension of hostilities that began Wednesday morning.

Easing geopolitical tensions typically weigh on gold, reducing its appeal as a safe-haven asset. Spot gold was little changed at $2,636.45 an ounce at 8:13 a.m. in Singapore. The Bloomberg Dollar Spot Index edged down 0.1% after dropping 0.7% in the previous session. Silver was steady, while platinum and palladium edged up.

Source: Bloomberg