PRECIOUS-Gold's record rally takes breather as spotlight shifts to Fed rate verdict

By Brijesh Patel

Sept 17 (Reuters) - Gold slipped on Wednesday due to a slight uptick in the dollar and profit-taking after bullion touched a record high in the previous session on expectations of a Federal Reserve interest rate cut.

Spot gold XAU= fell 0.5% to $3,671.61 per ounce, as of 0646 GMT, after hitting a record high of $3,702.95 on Tuesday.

U.S. gold futures GCcv1 for December delivery fell 0.4% to $3,709.

"Gold's ascent to $3,700 was aided by the decline in the USD and by bets that the Fed may signal that follow-up rate cuts are likely to arrive before year-end," KCM Trade Chief Market Analyst Tim Waterer said.

"Profit taking around the $3,700 level saw the precious metal dip back below this mark. But should the Fed adopt a particularly dovish tone in their meeting, gold could be making another move higher."

The dollar .DXY edged up 0.1% after dropping to a more than two-month low on Tuesday. Meanwhile, the benchmark U.S. 10-year Treasury yields US10YT=RR were hovering near a more than five-month low. USD/

Data on Tuesday showed U.S. retail sales increased more than expected in August, but a weakening labor market and rising prices because of tariffs pose a downside risk to continued strength in spending.

The U.S. central bank is expected to deliver a quarter-percentage-point rate cut later in the day to support the labor market. Remarks from Fed Chair Jerome Powell will be closely watched to gauge the pace of further easing.

Lower rates reduce the opportunity cost of holding non-yielding bullion.

U.S. President Donald Trump has called for Powell to enact a "bigger" rate cut.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.32% to 979.95 metric tons on Tuesday, from 976.80 tons on Monday. GOL/

Elsewhere, spot silver XAG= slipped 1.7% to $41.86 per ounce, platinum XPT= was steady at $1,391.15, and palladium XPD= dipped 1% to $1,164.66.