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Gold hits record high at $3,659.10/oz

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U.S. dollar at near seven-week low

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Focus on US CPI data on Thursday

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Palladium up more than 1%

(Updates for EMEA morning trade)

By Ishaan Arora

Sept 9 (Reuters) - Gold was set for another record

high on Tuesday, holding well above the $3,600-mark crossed in

the previous session, as growing bets of a U.S. rate cut

weakened the dollar and pushed bond yields lower, boosting

demand for the precious metal.

Spot gold was up 0.4% at $3,647.98 per ounce, as of

0726 GMT, after hitting a record high of $3,659.10 earlier in

the session. U.S. gold futures for December delivery

rose 0.3% higher to $3,688.10.

Gold prices have gained nearly 39% this year, following a

27% jump in 2024, bolstered by a soft dollar, strong central

bank accumulation, dovish monetary policy and heightened global

uncertainty.

The dollar index fell to a near seven-week low

against rivals, making gold more attractive to other currency

holders, while benchmark U.S. 10-year Treasury yields

held near five-month lows.

"Bulls have been energized by the market's rate cut

convictions, sending gold to fresh record highs. The softer

dollar also helped pave the way for $3,600, while bullion-backed

inflows and central bank purchases add to the strong mix of

tailwinds," said Han Tan, chief market analyst at Nemo.money.

Traders expect an 88% chance of a 25-basis-point Federal

Reserve rate cut next week and a 12% probability of a jumbo

50-bp reduction, CME Group's FedWatch tool showed. This comes

after Friday's data showed U.S. job growth weakened sharply in

August.

Lower interest rates pressure the dollar and bond yields,

raising the appeal of the non-yielding bullion.

Investors now await U.S. producer price data on Wednesday

and consumer price data on Thursday for further rate cut cues.

"We may see spot gold flirting with $3,700 this week if

markets are shown drastically lowered revisions to U.S. jobs

data and shockingly low CPI prints. Still, gold markets are

likely to reserve their bigger price reaction for the latest

policy clues out of the FOMC meeting," Han Tan added.

Elsewhere, spot silver edged 0.1% higher to $41.35

per ounce. Platinum gained 0.8% to $1,394.12 and

palladium climbed 1.4% to $1,149.61.