(Bloomberg) -- Gold inched higher as traders weighed the outlook for monetary policy after the Federal Reserve’s preferred measure of underlying inflation came in below expectations last week.
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Bullion traded near $2,632 an ounce in thin trading after closing 1.1% higher on Friday, following the print of the core US personal consumption expenditures price index for November. The reading was muted, a step in the right direction for policymakers looking to reduce interest rates further in 2025.
Lower rates are typically a positive for gold, as it doesn’t pay interest.
The precious metal has climbed more than a quarter this year and hit record levels, supported by US monetary easing, safe-haven demand, and buying by the world’s central banks. However, the rally eased after the election of Donald Trump, which boosted the dollar. A stronger greenback makes commodities priced in the currency more expensive for most buyers.
Spot gold was up 0.4% at $2,632.17 an ounce at 7:34 a.m. in London, after falling 1% last week. The Bloomberg Dollar Spot Index was flat, following a 0.6% weekly gain. Platinum and silver rose over 1%, while palladium advanced 0.7%.
--With assistance from Preeti Soni.
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