PRECIOUS-Gold prices trade above $3,600 on Fed rate-cut bets
Sept 9 (Reuters) - Gold prices hovered near a record high on Tuesday, holding firm above the $3,600 level, as growing expectations for a U.S. Federal Reserve interest rate cut this month lifted demand for the precious metal.
FUNDAMENTALS
* Spot gold XAU= was up 0.1% at $3,640.41 per ounce, as of 0103 GMT. Bullion rose to a record high of $3,646.29 on Monday.
* U.S. gold futures GCcv1 for December delivery edged 0.1% higher to $3,682.
* U.S. job growth weakened sharply in August and the unemployment rate increased to a nearly four-year high of 4.3%, confirming that labor market conditions were softening and sealing the case for a Fed rate cut next week.
* Traders are pricing in an 89.4% chance of a 25-basis-point rate cut at the Fed's September meeting and a 10.6% probability of a jumbo 50-basis-point rate cut, according to the CME Group's FedWatch tool.
* Lower U.S. interest rates put pressure on the dollar and bond yields, increasing the appeal of non-yielding bullion.
* The dollar index .DXY fell to an almost seven-week low against its rivals, making gold more attractive for other currency holders, while the benchmark U.S. 10-year yield US10YT=RR dropped to a five-month low. USD/ US/
* Meanwhile, the European Central Bank is widely expected to hold rates at its policy meeting on Thursday.
* Investors are now awaiting U.S. producer price data on Wednesday and consumer prices on Thursday for further clues on the Fed's policy path.
* Gold prices have gained 38% so far this year, following a 27% jump in 2024, bolstered by soft dollar, strong central bank accumulation, dovish monetary settings and heightened global uncertainty.
* SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.23% to 979.68 tons on Monday from 981.97 tons on Friday. GOL/ETF
* Elsewhere, spot silver XAG= was flat at $41.31 per ounce. Platinum XPT= gained 0.3% to $1,387.20 and palladium XPD= climbed 0.8% to $1,142.64.
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