Gold hovers near record high on dollar weakness, rate-cut bets

Gold prices rose on Monday to hover near an all-time high, supported by a weaker dollar and growing expectations that the Federal Reserve is likely to continue with interest rate cuts later this year.

FUNDAMENTALS

* Spot gold was up 0.5% at $3,776.72 per ounce as of 0150 GMT. Bullion hit a record of $3,790.82 last week.

* U.S. gold futures for December delivery were steady at $3,806.20.

* The U.S. dollar index eased 0.2% against its rivals, making greenback-priced bullion less expensive for overseas buyers.

* The U.S. Commerce Department said on Friday its Personal Consumption Expenditures Price Index (PCE) rose 0.3% in August, versus the prior 0.2% rise in July, matching the estimate of economists polled by Reuters. * Traders are currently pricing in a 90% chance of a Fed cut in October, with around a 65% probability of another in December, according to CME FedWatch Tool. * Share markets got off to a cautious start in Asia on Monday as investors braced for a possible shutdown of the U.S. government.

* Investors now await U.S. data on job openings, private payrolls, the ISM manufacturing PMI and Friday’s non-farm payrolls report for further clues on the economy’s health.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.89% to 1,005.72 tonnes on Friday from 996.85 tonnes on Thursday.

* Physical gold demand in China weakened further last week, with discounts hitting multi-year lows, while steady buying persisted in other major Asian hubs despite the high prices in anticipation of further gains.

* Elsewhere, spot silver rose 0.6% to $46.26 per ounce, platinum climbed 2.2% to $1,602.45 and palladium gained 0.8% at $1,279.68.

DATA/EVENTS (GMT)

0900 EU Consumer Confid. Final Sep.