Gold prices rose on Monday, driven by growing expectations of a US interest rate cut that pressured the dollar, ahead of a Federal Reserve policy meeting this week.
Spot gold rose 0.3% to $4,209.43 per ounce by 0851 GMT. US gold futures for December delivery fell 0.1% to $4,239.40 per ounce.
The dollar index edged lower, hovering near the one-month low reached on December 4, making dollar-priced gold more affordable for overseas buyers.
"Gold is benefiting from a weaker U.S. dollar and market participants expecting the Fed to cut interest rates this week," said UBS analyst Giovanni Staunovo.
Data last week showed that US consumer spending grew moderately in September. That reflected a slowdown in economic momentum amid rising costs and weakness in the labor market as private payrolls saw their steepest decline in over two-and-a-half years in November.
According to CME's FedWatch tool, markets are pricing in an 87% probability of a 25-basis-point rate cut at the Fed's December 9-10 policy meeting, following the release of weak economic data and dovish remarks from several Fed officials.
Lower interest rates typically bolster demand for non-yielding assets like gold.
"We still look for more rate cuts next year, which should push gold to $4,500/oz next year," added Staunovo.
Silver was up 0.3% at $58.43 per ounce, after hitting a record high of $59.32 on Friday.
"Silver is benefiting from the same factor as gold. Additionally the expectation of improving industrial demand as a result of monetary and fiscal stimulus helped silver to outperform gold in recent weeks," Staunovo said.
The white metal has doubled in price this year, driven by supply deficits and its designation as a critical mineral by the US.
Elsewhere, platinum gained 0.6% to $1,650.90 and palladium rose 1% to $1,471.26.
