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US PCE data due on Friday

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Silver hits over one-month peak

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Fed Governor Cook sues Trump after he attempted to fire

her

(Rewrites for U.S. early-morning session)

By Sarah Qureshi and Anushree Mukherjee

Aug 28 (Reuters) - Gold prices hit a five-week high on

Thursday, supported by a softer dollar, and safe-haven flows due

to ongoing concerns over the Federal Reserve's independence.

Spot gold rose 0.4% to $3,410.82 per ounce at 1012

a.m. ET (14:12 GMT), its highest level since July 23.

U.S. December gold futures were up 0.6% at

$3,468.30.

The dollar slipped 0.4%, making greenback-priced gold more

affordable for overseas buyers.

"Gold has been climbing quietly but steadily higher for over

a week due in part to rising concerns about Fed independence.

Trump's pressure... is spurring unease that the FOMC could cut

rates more quickly and keep them lower for longer, which is good

for gold," said Tai Wong, an independent metals trader.

Markets are currently pricing in a more than 87% chance

of a quarter-point rate cut at the Fed's September meeting, as

per

CME FedWatch tool

.

Investors now await Friday's Personal Consumption

Expenditures (PCE) data, a key inflation gauge for the U.S.

central bank.

Non-yielding gold thrives in a low interest-rate environment

and during times of economic uncertainty.

Federal Reserve Governor Lisa Cook filed a lawsuit claiming

Trump has no power to remove her from office, setting up a legal

battle that could reset long-established norms for the U.S.

central bank's independence.

Meanwhile, the number of Americans filing new applications

for jobless benefits fell last week, but tepid hiring could

raise the unemployment rate to 4.3% in August.

Elsewhere, spot silver was up 1% at $38.97 per ounce,

after touching its highest point since July 25 earlier today.

"Silver has had a great quarter but momentum slumped in

August and it's waiting for a spark. Some think silver will take

off like an antelope above $40. That might coincide with gold

making new highs," said Wong.

Platinum slipped 0.1% to $1,346.51, while palladium

climbed 1.1% to $1,103.70.