Gold edges higher as Fed backs September easing
Aug 26 (Reuters) -Gold prices ticked up on Monday, extending gains from the last session as Federal Reserve Chair Jerome Powell's dovish remarks solidified expectations of an interest rate cut next month.
FUNDAMENTALS
* Spot gold XAU= rose 0.2% to $2,516.09 per ounce by 0027 GMT. U.S. gold futures GCcv1 gained 0.2% to $2,551.30.
* The dollar =USD hovered near its lowest level in about eight months, making gold cheaper for other currency holders, while benchmark 10-year yields US10YT=RR also slipped.
* On Friday, Powell signalled support for policy easing, saying that "the time has come" for the Fed to cut rates amid rising risks to the job market, even as inflation was in reach of the U.S. central bank's 2% target.
* Traders have fully priced in a Fed easing for next month, with a 64% chance of a 25-basis-point cut and about 36% chance of a bigger 50-bp reduction, according to the CME FedWatch tool.
* A low interest rate environment tends to boost non-yielding bullion's appeal.
* Meanwhile, on the geopolitical front, Hezbollah launched rockets and drones at Israel early on Sunday, prompting Israel's military to strike Lebanon with around 100 jets, marking one of the biggest clashes in 10 months of border warfare.
* SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.20% to 856.12 tonnes on Friday. GOL/ETF
* On the physical demand side, a rally in gold prices stifled bullion's appeal in major Asian hubs last week, with dealers offering deeper discounts to charm buyers. GOL/AS
* Spot silver XAG= edged 0.3% higher to $29.90 per ounce, platinum XPT= was flat at $962.65 and palladium XPD= fell 0.3% to $959.43.
DATA/EVENTS (GMT)
0500 Japan Leading Indicator Revised June
0800 Germany Ifo Business Climate New August
0800 Germany Ifo Curr Conditions New August
0800 Germany Ifo Expectations New August
1230 US Durable Goods July
Reporting by Daksh Grover in Bengaluru; Editing by Subhranshu Sahu
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