PRECIOUS-Gold holds ground as investors await US data for more Fed cues

Aug 28 (Reuters) - Gold prices remained stable on Thursday, as market participants awaited U.S. economic data due this week that could help shed further light on the Federal Reserve's interest rate trajectory.

FUNDAMENTALS

Spot gold XAU= held its ground at $3,390.91 per ounce, as of 0112 GMT, after hitting its highest point since August 11 earlier in the session.

U.S. gold futures GCcv1 for December delivery was flat at $3,446.70.

Investors are now awaiting the release of the Personal Consumption Expenditures (PCE) Price Index, the preferred inflation measure of the U.S. Fed, scheduled for Friday.

Economists polled by Reuters expect the PCE price index USPCEY=ECI to rise 2.6% in July, matching the climb from the prior month.

Markets are anticipating an over 88% chance of a 25-basis-point rate cut at the Fed's policy meeting next month, according to CME FedWatch Tool.

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

New York Fed Bank President John Williams said on Wednesday it is likely interest rates can fall at some point but policymakers will need to see what upcoming data indicate about the economy to decide if it's appropriate to make a cut next month.

The dollar opened weaker on Thursday as traders increased bets on a Fed interest rate reduction next month following comments from Fed's Williams. USD/

A weaker dollar makes gold less expensive for the other currency holders.

Meanwhile, Fed Governor Lisa Cook's lawsuit against U.S. President Donald Trump's effort to fire her could be filed soon, CNBC reported, citing sources.

SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.27% to 962.50 tons on Wednesday from 959.92 tons on Tuesday. GOL/ETF

Elsewhere, spot silver XAG= was up 0.1% at $38.66 per ounce, platinum XPT= eased 0.3% to $1,343.69 and palladium XPD= climbed 0.3% to $1,094.42.

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