02:00 PM EST, 12/02/2024 (MT Newswires) -- (Updates prices.)

Gold traded lower mid-afternoon on Monday as the dollar climbed on rising expectations the Federal Reserve may not lower interest rates when the central bank's policy committee meets later this month.

Gold for February delivery was last seen down US$21.70 to US$2,659.30 per ounce.

The precious metal has been mostly rangebound since correcting from a record high of US$2,800.80 on Oct.30, as the dollar surged following the U.S. election and inflation remains stuck above the Federal Reserve's 2% target.

"Gold slipped as the dollar rose overnight, highlighting its current rangebound behavior while we await fresh US economic data input and guidance on the pace and timing of additional US rate cuts," Saxo Bank noted.

The U.S. October personal consumption expenditures index, the Fed's preferred inflation measure, was last week reported to have risen at a 2.3% annualized rate, up from 2.1% in September. The rise, as well as potential economic turmoil from the incoming Trump Administration in January, has some analysts expecting the Fed will stand pat at the Dec. 18 end of the meeting the Federal Open Market Committee.

The CME FedWatch Tool still sees a 62% probability the committee will cut rates by 25 basis points at the meeting, but that is down from 83% a month earlier. Expectations the Fed will leave rates unchanged rose to 38% from 17%.

The dollar rose early, with the ICE dollar index last seen up 0.76 points to 106.50.

Treasury yields also rose, with the U.S. two-year note last seen paying 4.202%, up 4.3 basis points, while the yield on the 10-year note up 1.8 points to 4.193%.