Gold prices traded near a six-week high on Monday, supported by a weaker dollar and firm expectations that the Federal Reserve could cut interest rates at its meeting later this month.

Spot gold was last up 0.2% at $4,240.55 an ounce by 02:32 ET (06:32 GMT), after reaching a six-week high of $4,256.2 earlier in the day. U.S. Gold Futures for February rose 0.5% to $4,274.55.

Gold prices had jumped more than 4% last week.

Gold supported by weaker dollar, Fed cut bets

The US Dollar Index traded at a two-week low on Monday, making bullion more attractive for non-U.S. buyers, while risk-off sentiment in broader markets helped sustain demand for safe-haven assets.

Market pricing now reflects an 87% probability of a 25-basis-point Fed rate cut in December, driven by a run of softer U.S. economic data and indications that inflation pressures are receding.

The shift in expectations has strengthened over the past week, yet investors remain cautious due to a lack of fresh official data following the prolonged government shutdown. Mixed commentary from Fed policymakers has also added to the uncertainty.

Political developments added another layer of intrigue. U.S. President Donald Trump said on Sunday that he already knows whom he intends to nominate as the next Federal Reserve Chair, though he did not reveal the candidate.

His comments revived speculation around several names viewed as contenders, including Kevin Hassett, former Fed Governor Kevin Warsh, and current Governor Christopher Waller.

The choice could influence expectations for the pace and depth of rate cuts over the coming year.

With the ongoing uncertainty, gold's near-term momentum has remained intact. Investors continued to seek protection against volatility in both equity and currency markets.

Silver hits record high; copper muted

Other precious and industrial metals traded mixed on Monday.

Silver Futures gained 0.4% to $56.65 per ounce, after hitting a record high of $57.815/oz. Platinum Futures rose 0.7% to $1,700.60/oz.

Benchmark Copper Futures on the London Metal Exchange was muted at $11,207.20 a ton, while U.S. Copper Futures were also steady at $5.30 a pound.

Data on Monday showed that China's factory activity slipped further into contraction, with both official and private PMIs underscoring the eighth straight month of decline.

Source : Investing.com