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

Spot gold was up 0.5% at $4,249.05 an ounce by 07:49 ET, after reaching a six-week high of $4,256.2 earlier in the day. U.S. gold futures for February rose 0.7% to $4,283.25 an ounce. Gold prices jumped more than 4% last week.

The U.S. dollar index, which tracks the greenback against a basket of currency pairs, briefly slipped to a two-week low on Monday. This has helped make bullion more attractive for foreign buyers, while risk-off sentiment in broader markets partially contributed to sustained 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 of easing, albeit sticky, inflation pressures.

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 Fed Chair, though he did not reveal the candidate.

His comments revived speculation around several names viewed as contenders, including White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh, and current Fed 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.

Elsewhere, silver rose to an all-time high, with analysts cited by Reuters pointing to help from gold's rally and hopes for more industrial demand in 2026.

Benchmark copper futures on the London Metal Exchange were higher by 0.7% at $11,282.00 a ton. Last week, copper prices on the London Metal Exchange notched a new record high, boosted by a weaker dollar, lower output from major producer Chile and planned production drawdowns at Chinese smelters.

Source : Investing.com