It is normal. Are you running synthetic engine oil? If not, shame on you :) But in all seriousness, you should be running synthetic engine oil. I won't even run the lower end synthetics in my 855T, let alone dino oil. This won't take away all the ticking, but it will be greatly reduced.
The reason it happens is because the hydraulic lifters on the I5 Volvo engines do not get enough oil pressure at start up. It takes a couple minutes for the engine oil to reach operating temperatures and to reach the valves. However, if you just start the car and leave it, this doesn't build adequte oil pressure either. Volvo recommends 2000rpm for optimum warming up conditions.
The fact that you notice it most at operating temperatures and at idle/in stop and go traffic is a little disturbing. When was the last time you checked your engine oil level? Are you sure you have enough? Lack of engine oil can also cause this problem. The fact that Volvo I5 engines are known amongst long time owners to consume oil, especially the turbo engines, can lead to unknowingly low engine oil levels. This is why some Volvo dealerships are reported to pump excess amounts of engine oil into the engine during oil changes.
But once again, valve noise is normal to a certain extent. Just check the engine oil level, and switch to synthetic. It may cost more, but it saves you TONNES when it comes to maintenance in the long run.
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