09:39 AM EDT, 09/16/2024 (MT Newswires) -- Gold edged up to a second-straight record early on Monday, sticking to above the US$2,600 mark as the dollar weakened on rising expectations the Federal Reserve's policy committee will deliver an outsized cut to U.S. interest rates this week.

Gold for December delivery was last seen up US$1.50 to US$2,612.20 per ounce.

The Federal Open Market Committee is now expected to cut interest rates by 50 basis points when it ends its two-day meeting on Wednesday afternoon. The CME Fedwatch tool now sees a 65% probability of a 50 basis point rate cut, with a 35% chance of a 25 point cut. A week ago, the tool showed a 70% chance for the smaller drop.

Gold rose "following a week that saw prices once again accelerate to the upside as the dollar and yields softened and traders entertained the prospect for a 50-basis point cut", Saxo Bank noted.

Lower interest rates are bullish for gold because they cut the carrying cost of owning the metal, which pays no interest.

The dollar was sharply lower early, with the ICE dollar index last seen down 0.42 points to 100.69.

Treasury yields also eased, with the U.S. two-year note last seen paying 3.572%, down 2.3 basis points, while the yield on the 10-year note was last seen down 0.4 points to 3.653%.