PRECIOUS-Gold rises as Fed rate cut bets pressure dollar, yields

Aug 5 (Reuters) - Gold prices rose on Tuesday, after gaining in the last three sessions, supported by a weaker U.S. dollar and lower Treasury yields following last week's weak U.S. jobs data that boosted expectations of a Federal Reserve rate cut in September.

FUNDAMENTALS

Spot gold XAU= rose 0.2% to $3,380.61 per ounce as of 0052 GMT. U.S. gold futures GCcv1 also gained 0.2% to $3,434.30.

The dollar index .DXY fell for the third straight session on Tuesday, making gold more affordable for holders of other currencies. Meanwhile, the yield on the benchmark 10-year Treasury note US10YT=RR dropped to a three-week low. USD/ US/

On Friday, U.S. President Donald Trump fired Erika L. McEntarfer, the commissioner of the U.S. Bureau of Labor Statistics, after data showed employment growth was weaker than expected last month.

U.S. employment growth was softer than expected in July, while the non-farm payrolls counts for May and June were revised down by a massive 258,000 jobs, suggesting a sharp deterioration in the labor market conditions.

San Francisco Fed Bank President Mary Daly said on Monday that given mounting evidence that the U.S. job market is softening and no signs of persistent tariff-driven inflation, the time is nearing for rate cuts.

According to the CME FedWatch tool, traders now see an 94.4% chance of a September rate cut. FEDWATCh

Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.18% to 954.80 tonnes on Monday from 953.08 tonnes on Friday. GOL/

Elsewhere, spot silver XAG= rose 0.1% to $37.41 per ounce, platinum XPT= gained 0.1% to $1,330.17 and palladium XPD= eased 0.1% to $1,204.87.

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