* Spot gold was up 0.3% at $1,983.81 per ounce, as of 0041 GMT. U.S. gold futures also gained 0.3% to $1,985.70.
* The dollar languished near more than a 2-1/2-month low against its rivals, as investors expect U.S. interest rates to fall next year and see that as a signal to sell the greenback in anticipation.
* A weaker dollar makes gold less expensive for other currency holders.
* Minutes from the Fed’s latest meeting are due at 1900 GMT on Tuesday. Signs of slowing inflation in the United States and weaker-than-expected jobless claims data last week boosted expectations that the U.S. central bank was done raising interest rates.
* Markets are widely expecting the Fed to leave rates unchanged in the December meeting and currently pricing in a greater than 50% chance of a rate cut of at least 25 basis points by May, according to CME’s FedWatch Tool.
* Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
* Benchmark U.S. 10-year Treasury yields were hovering near two-month lows touched last week.
* Inflation is likely to remain “stubborn” and force the Federal Reserve to keep interest rates elevated for longer than investors anticipate, Richmond Fed president Thomas Barkin said.
* One U.S. recession gauge – the Conference Board’s October leading economic indicator – showed on Monday a decline of 0.8%, its 19th straight monthly fall.
* Spot silver rose 0.5% to $23.52 per ounce, while platinum was up 0.1% at $919.40. Palladium was flat at $1,077.14 per ounce. DATA/EVENTS (GMT) 1500 US Existing Home Sales Oct 1900 US Federal Open Market Committee issues minutes from its Oct. 31 – Nov. 1 meeting
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