Gold prices inch higher amid softer dollar

Gold prices edged up 0.2% to $2,024.11 per ounce as of 16:40 GMT on Monday, seeing a small rise helped by a weaker U.S. dollar. The uptick comes as traders eye the U.S. Federal Reserve’s policy stance following its recent dovish turn.

Last week, the Fed kept rates steady and signalled that its historic tightening cycle may be nearing an end as inflation falls faster than anticipated. This has weakened the dollar and bond yields, offering support for non-yielding gold. With inflation potentially peaking, traders now see a 70% chance of a March rate cut.

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The Fed’s evolving outlook and guidance will remain in focus for gold traders. For now, prices continue to find support from a more dovish Fed, global growth woes, and geopolitical tensions.

Traders remain in buy-on-dips mode amid a constructive technical backdrop for the precious metal. Key U.S. economic releases this week, including November’s PCE data, will also be monitored for clues on the policy path.