Gold advanced on Monday on a weaker dollar as traders stuck to bets on interest rate cuts before year-end despite comments from Federal Reserve officials, with focus also on the U.S. debt ceiling talks.

Spot gold was up 0.3% at $2,016.19 per ounce by 10:35 a.m. EDT (1435 GMT), rebounding from its May 5 low touched on Friday. U.S. gold futures rose 0.1% to $2,021.10.

The dollar eased from a five-week high, making bullion cheaper for overseas buyers.

Gold on course for weekly drop on stronger dollar

“Investors will continue to deploy their capital in gold as the prospect of a rate-cutting cycle continues to firm over the next 12 months,” said Daniel Ghali, commodity strategist at TD Securities.

Most market participants were still betting on at least one rate cut before 2023 ends, according to the CME’s FedWatch tool. Higher interest rates dim appeal for zero-yield gold.

Minneapolis Fed President Neel Kashkari said there was more work to be done to rein in inflation, while Atlanta Fed president Raphael Bostic played down chances of rate cuts this year.

Any hawkish comments are “essentially disregarded” because the market is inferring what the Fed might end up doing based on incoming data as opposed to what they are saying, Ghali added.

Focus will be on more Fed speakers this week, including Chair Jerome Powell.

Wall Street, meanwhile, gained on optimism for a likely deal to raise the U.S. debt limit.

While gold remains supported by factors including rate cut bets, a “major risk-on wave stemming from a deal could drag gold into the sub-$2,000 domain”, said Han Tan, chief market analyst at Exinity.

Silver rose 0.7% to $24.07 per ounce, platinum gained 1.2% to $1,061.57, and palladium climbed 1.6% to $1,533.28.

Rising demand from automakers, industry and investors will push the global platinum market into its biggest deficit in years, three industry reports predicted.