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Fed Governor Lisa Cook to file lawsuit against Trump's

firing

attempt

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Markets expect 90% chance of 25-basis point rate cut next

month

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U.S. PCE data due on Friday

(Rewrites for US early morning session)

By Sarah Qureshi and Anushree Mukherjee

Aug 27 (Reuters) - Gold fell on Wednesday as the dollar

and Treasury yields firmed, but the losses were limited by

safe-haven demand amid lingering concerns about the U.S. central

bank's independence after President Donald Trump's efforts to

fire a Fed governor.

Spot gold was down 0.4% to $3,379.76 per ounce at

1018 a.m. ET (14:18 GMT). U.S. gold futures for December

delivery eased 0.1% to $3,428.

The dollar index climbed 0.4% against a basket of

major currencies, making greenback-priced gold more expensive

for overseas buyers.

"We're seeing a stronger U.S. dollar index today and a

slight uptick in bond yields... yields are putting selling

pressure on the gold and silver markets," said Jim Wyckoff,

senior analyst at Kitco Metals.

U.S. Treasury yields edged up 0.4%, weighing on

non-yielding gold's appeal.

Trump said earlier this week he was removing Federal Reserve

Governor Lisa Cook from her position on the Fed's board of

directors. Meanwhile, Cook's lawyer said she would file a

lawsuit to prevent Trump from firing her, kicking off a

potentially protracted legal fight.

Gold prices rose to a more than two-week high on Tuesday,

following Trump's attempt to fire Cook.

Investors now await Thursday's GDP data and Friday's

Personal Consumption Expenditures - the Fed's preferred

inflation gauge - for cues on the interest-rate path. Economists

polled by Reuters expect the PCE price index to

rise 2.6% in July, matching June's rise.

"If (the PCE data) is a miss showing stronger inflation,

that might begin to call into question whether the Fed's going

to be able to cut interest rates in September. But I suspect it

would take an awfully strong inflation number to preempt the Fed

from cutting rates in September," Wyckoff said.

Markets are currently anticipating a more than 90% chance of

a 25-basis-point rate cut at the Fed's policy meeting next

month, according to CME FedWatch Tool.

Elsewhere, spot silver edged 0.7% lower to $38.31 per

ounce, platinum slipped 0.5% to $1,341.83, and palladium

dropped 0.6% to $1,087.44.