PRECIOUS-Gold rises on increasing Fed rate-cut bets, weaker dollar

By Anmol Choubey

Aug 13 (Reuters) - Gold rose on Wednesday as expectations of a U.S. Federal Reserve interest rate cut in September gained traction following mild inflation data, while a weaker dollar bolstered demand.

Spot gold XAU= gained 0.6% to $3,363.61 per ounce by 1026 GMT. U.S. gold futures GCcv1 for December delivery rose 0.5% to $3,414.10.

"Market participants are starting to debate if the Fed will do a 50 basis point cut at its September meeting following the comments from U.S. Treasury Secretary Bessent yesterday, with a focus on incoming weaker U.S. economic data supporting that," said UBS commodity analyst Giovanni Staunovo.

Markets are pricing in a more than 96% chance of a Fed rate cut next month, after July's mild inflation bump signalled limited impact from U.S. import tariffs on consumer prices, with at least one additional reduction anticipated by year-end. USDIRPR

Gold, a non-yielding asset often viewed as a safe haven during times of economic or geopolitical uncertainties, typically benefits from a low-interest-rate environment.

The dollar index .DXY hit a two-week low, making greenback-priced bullion more affordable for overseas buyers. USD/

Europe and Ukrainian leaders will speak with U.S. President Donald Trump at a virtual meeting on Wednesday ahead of his summit with Russian President Vladimir Putin, as they try to drive home the perils of selling out Kyiv's interests in pursuit of a ceasefire.

"Don't expect those talks to meaningfully influence the gold market, (they) might trigger some short-term volatility. Near-term prices are likely to move sideways, until incoming U.S. economic (data) starts to support a faster (Fed) rate cut cycle," Staunovo said.

Meanwhile, the U.S. and China extended their tariff truce by another 90 days, averting triple-digit duties on each other's goods.

Spot silver XAG= rose 1.7% to $38.53 per ounce, platinum XPT= was up 0.7% at $1,345.89 and palladium XPD= gained 0.5% to $1,135.45.

Reuters Terminal users can see related news and prices by clicking on the codes in brackets:
All precious metals headlines           GOL
Precious metals market reports          GOL/
European gold prices                    GOLD/EU1GOLD/EU20#PREC
London Bullion Market Association       LBMA01
New York Comex gold 0#GC: and silver  0#SI:
New York platinum 0#PL: and palladium 0#PA: