PRECIOUS-Gold inches higher as dollar weakens on Fed rate cut hopes

Aug 7 (Reuters) - Gold prices edged higher on Thursday, helped by a weaker dollar on growing expectations of a Federal Reserve rate cut next month, while investors awaited U.S. President Donald Trump's nominations to the central bank's Board of Governors.

FUNDAMENTALS

Spot gold XAU= added 0.1% at $3,372.97 per ounce as of 0057 GMT. U.S. gold futures GCcv1 gained 0.3% to $3,442.20.

The dollar index .DXY hovered near more than one-week low after a surprisingly weak U.S. jobs data last week triggered bets for Fed rate cuts from September.

Traders are now pricing in a 95% chance of a 25-basis-point cut next month, up from 48% a week ago, according to the CME Group's FedWatch Tool.

The Fed may need to cut rates in the near-term in response to a slowing U.S. economy, even though it remains unclear whether tariffs will continue to push inflation higher, Minneapolis Fed President Neel Kashkari said.

Meanwhile, Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying the country directly or indirectly imported Russian oil, adding to 25% tariffs already announced.

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

On Wednesday, Trump said that over the next few days he would likely nominate a candidate to serve the remaining months of a soon-to-be-vacant position on the Fed's Board of Governors, leaving the choice of a permanent replacement for a later date.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.33% to 952.79 tonnes on Wednesday from 955.94 tonnes on Tuesday. GOL/ETF

Elsewhere, spot silver XAG= was steady at $37.83 per ounce, platinum XPT= gained 0.2% to $1,336.74 and palladium XPD= rose 0.7% to $1,139.98.

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