Gold hit a more than four-month high on Monday, as increased bets for a U.S. Federal Reserve interest rate cut this month lifted bullion's allure, while silver rose above $40 per ounce for the first time in more than a decade.
By 0238 GMT, spot gold rose 0.7% to $3,470.69 per ounce, hitting its highest since April 23. U.S. gold futures for December delivery gained 0.8% to $3,543.70.
Spot silver rose 1.6% to $40.31 per ounce, the highest since September 2011.
"Dovish comments from Fed's Daly helped traders looked past a higher core PCE read on Friday, and kept the door open for a 25 basis point cut this month," City Index senior analyst Matt Simpson said.
"Though a U.S. appeals court has also deemed most of (U.S. President Donald) Trump's tariffs illegal to weigh further on the U.S. dollar today and send gold to a four-month high."
Data showed that the U.S. Personal Consumption Expenditures (PCE) price index rose 0.2% month-on-month, and 2.6% year-on-year, both in line with expectations.
In a social media post on Friday, San Francisco Fed Bank President Mary Daly reiterated her support for an interest rate cut, given the risks to the labor market.
Traders are currently pricing in an 87% chance the Fed will ease rates by 25 basis points later this month, according to the CME FedWatch tool.
Non-yielding gold typically performs well in a low-interest-rate environment.
Focus now shifts to the U.S. non-farm payrolls data, due on Friday, that could determine the size of the Fed's expected rate cut later this month.
On the trade front, U.S. Trade Representative Jamieson Greer said on Sunday the Trump administration is continuing its talks with trading partners despite a U.S. appeals court ruling that most of Trump's tariffs are illegal.
Elsewhere, platinum gained 0.9% to $1,376.95 and palladium climbed 0.8% to $1,118.12. - Reuters
