PRECIOUS-Gold hovers near record high ahead of US inflation data

By Ishaan Arora

Sept 10 (Reuters) - Gold prices hovered near an all-time high on Wednesday, buoyed by expectations of a U.S. interest rate cut later this month, while market participants awaited U.S. inflation data for clues on the Federal Reserve's monetary policy path.

Spot gold XAU= was up 0.8% at $3,655.77 per ounce, as of 1127 GMT, after hitting a record high of $3,673.95 on Tuesday.

U.S. gold futures GCcv1 for December delivery rose 0.3% to $3,694.60.

"Gold's gains come on the back of expectations of Fed rate cuts, supported by signs of cooling in the U.S. labour market, which have weakened the dollar," Ricardo Evangelista, senior analyst at ActivTrades said.

Last week, U.S. nonfarm payroll data pointed to weakening labor market conditions, and sealed the case for a rate cut at the Fed's policy meeting next week.

The U.S. economy likely also created 911,000 fewer jobs in the 12 months through March than previously estimated, the government said on Tuesday, suggesting that job growth was already stalling before U.S. President Donald Trump's aggressive tariffs on imports.

"The outsized jobs revisions in the U.S. are almost certainly adding to the pervading sense of economic uncertainty and such out-of-left-field economic shifts underscore the role of gold as a safe-haven asset," independent analyst Ross Norman said.

Markets are pricing in a 92% chance of a 25-basis-point rate cut, while the likelihood of a larger 50-basis-point cut stands at around 8%, according to CME Group's FedWatch Tool.

The U.S. producer price inflation data, due at 1230 GMT, and the consumer price inflation reading on Thursday will be closely watched for more cues on the Fed's interest rate trajectory.

Non-yielding gold typically performs well in a low-interest-rate environment.

Gold prices have gained 39% so far this year, following a 27% jump in 2024, bolstered by a soft dollar, strong central bank accumulation, dovish monetary settings and heightened global uncertainty.

ANZ Group raised its year-end gold price forecast on Wednesday to $3,800 per ounce and expects prices to peak near $4,000 by next June.

Elsewhere, spot silver XAG= added 0.8% to $41.20 per ounce. Platinum XPT= gained 1.8% to $1,392.10 and palladium XPD= rose 1.6% to $1,166.64.

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