Gold hovers near record high on US rate-cut hopes, soft dollar

Gold prices climbed to a more than four-month high on Tuesday, inching closer to the all-time high touched in April, supported by a weaker dollar and growing expectations for a U.S. interest rate cut this month.

FUNDAMENTALS * Spot gold rose 0.5% to $3,492.50 per ounce as of 0118 GMT – the highest since April 22, when prices rose to a record high of $3,500.05.

* U.S. gold futures for December delivery gained 1.4% to $3,563.40.

* The U.S. dollar languished near a more than one-month low against its rivals, making gold less expensive for overseas buyers.

* Data on Friday showed that the U.S. personal consumption expenditures price index rose 0.2% month-on-month and 2.6% year-on-year, both in line with expectations.

* Traders are currently pricing in a 90% chance of a 25-basis-points rate cut by the U.S. Federal Reserve at the end of its policy meeting on September 17, according to the CME FedWatch tool. * Non-yielding gold typically performs well in a low-interest-rate environment. * On Monday, U.S. Treasury Secretary Scott Bessent said the Fed is and should be independent but added that it had “made a lot of mistakes” and defended President Donald Trump’s right to fire Fed Governor Lisa Cook over allegations of mortgage fraud.

* Trump has criticised the Fed and its chair, Jerome Powell, for months for not lowering interest rates, and recently took aim at Powell over a costly renovation of the bank’s Washington headquarters.

* Investors are now looking forward to the U.S. non-farm payrolls data due on Friday to determine the size of the Fed’s expected rate cut later this month.

* Elsewhere, spot silver slipped 1.1% to $40.77 per ounce, after hitting its highest since September 2011 in the last session. Platinum gained 1.1% to $1,414.45 and palladium roe 0.8% to $1,128.

DATA/EVENTS (GMT)

0900 EU HICP Flash YY Aug

0900 EU HICP-X F, E, A, T Flash MM, YY Aug

1345 US S&P Global Mfg PMI SA Aug