PRECIOUS-Gold at record high as further Fed rate cut hopes spur investor demand

By Anmol Choubey

Sept 22 (Reuters) - Gold prices surged to a record high on Monday as investors turned to the yellow metal following last week's U.S. interest rate cut and the Federal Reserve's signal of potential further easing.

Also on their radar are a series of speeches from Fed officials and key U.S. inflation data later this week.

Spot gold XAU= rose 0.7% at $3,709.29 per ounce, as of 0637 GMT, after hitting a record high of $3,711.55.

U.S. gold futures GCcv1 for December delivery climbed 1% to $3,743.40.

"Gold is finding its feet again today, with traders focusing on upside price potential between now and year-end fuelled by projected further rate cuts from the Fed," said KCM Trade Chief Market Analyst Tim Waterer, adding that sustained central bank buying also continues to support gold's momentum.

The U.S. core Personal Consumption Expenditures (PCE) price index, the central bank's preferred inflation gauge, on Friday, and speeches of at least a dozen Fed officials, including Chair Jerome Powell on Tuesday, could give further insights into the bank's monetary policy outlook.

"New high watermarks could be hit by the precious metal this week if U.S. macro data continues to support the dovish Fed narrative," Waterer said.

The Fed cut rates by 25 basis points on Wednesday while cautioning about persistent inflation.

Investors are broadly expecting two more rate cuts this year — 25 bps each in October and December — with probabilities of 93% and 81%, respectively, according to the CME FedWatch tool.

Bullion, which typically performs well in a low-interest-rate environment, has risen nearly 42% this year, driven by broader geopolitical and economic uncertainty, central bank buying, and monetary policy easing.

Spot silver XAG= rose 1.3% to $43.64 per ounce, hovering near a 14-year high. Platinum XPT= gained 1.2% to $1,420.48 and palladium XPD= rose 1.2% to $1,163.24.

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