'96 850 N/A Wagon.

Steering pump has been slowly losing fluid. About an ounce or two a week.

Inspected and found that the small end of the driver's side gaiter had broken and there was an occassional drip from there of power steering fluid.

Replacing the gaiter is not a big deal, but I am concerned about the presence of power steering fluid in this part of the rack assembly.

Shouldn't power steering fluid be restricted to the inner portions of the rack and there should only be grease in the area of the gaiters?

Or, is this minor amount of power steering fluid in the gaiters normal?

Right...the broken bellows seal has allowed dirt and grit to get onto the rod and wear the seal. An "ounce or two a week" is not normal. I've gone years and not added any PS fluid on any of my cars. I'm pretty sure you're stuck with a leak until the rack is replaced. I'm not sure if "leak preventive" PS fluids would help. I think they're designed to help more with leaky hoses or stationary fittings. Some say they help seals but I think that's when they have normal uniform wear. Yours have been scraped with dust and grit.