Gold advances on weaker dollar ahead of US inflation test

The dollar slipped 0.1%, making gold cheaper for overseas buyers.

"Closer to the summer, you're going to see gold go higher just with the expectation of rate cuts, unless the Fed changes stance or makes some announcement that they're taking cuts off the table, which I don't see them doing at this point," said Bob Haberkorn, senior market strategist at RJO Futures.

Market focus is on the U.S. Core Personal Consumption Expenditure Price Index data due on Friday.

"If the (PCE) numbers are higher than expected, then gold will probably pull back, but I expect those dips to be brought up fairly quickly," Haberkorn said.

Market reaction to the data may only be seen next week, on account of the Good Friday holiday.

Non-yielding bullion logged a record high of $2,222.39 last week after Fed policymakers indicated that they still expected to cut rates by three-quarters of a by end-2024.

Gold prices also continue to find support from elevated physical from Chinese households, where gold's record rally has not tarnished the buying appetite.

Central purchases also sustain their support for gold, with China's central bank steadily building its gold reserves.

"The motivating factor for their gold purchases is diversification away from the G7 currencies, after these currencies were weaponized in 2022 following the (Russia-)Ukraine war," said Nitesh Shah, commodity strategist at WisdomTree.

Spot silver fell 0.4%, to $24.57, platinum gained 0.2%, to $904.62, while palladium lost 0.2%, to $1,002.41.