Spot gold was up 0.3% at $4,212.70 per ounce

Gold nudged higher on Monday, supported by a weaker dollar as traders grew more confident the U.S. central bank will deliver an interest-rate cut at its policy meeting this week.

Spot gold was up 0.3% at $4,212.70 per ounce, as of 0319 GMT. U.S. gold futures for December delivery were steady at $4,241.30 per ounce.

The U.S. dollar edged lower to hover near one-month lows hit on December 4, making dollar-priced gold cheaper for overseas buyers.

Core PCE data came and went without incident, which leaves the Fed on track to cut rates this week, with this expectation of looser monetary conditions driving gold to the upside, KCM Trade Chief Market Analyst Tim Waterer said.

The anticipated rate cut this week is keeping the dollar in check while simultaneously giving the gold price some room to move northwards, he added.

U.S. consumer spending increased moderately in September after three straight monthly gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lacklustre labour market and rising cost of living curbed demand.

This followed private payroll data showing the sharpest decline in more than two-and-a-half years last month.

Dovish commentary from several U.S. central bank officials has further fuelled expectations of monetary easing.

CME’s FedWatch tool shows markets pricing in roughly an 88% possibility of a 25-basis-point rate cut at the central bank’s December 9-10 meeting.

Lower interest rates tend to favour non-yielding assets such as gold.

Silver slid 0.4% to $58.06 per ounce, after touching a new record high of $59.32 on Friday. The metal is up more than 100% so far this year.