July 29 (Reuters) - Gold prices firmed on Monday amid

expectations of a U.S. rate cut in September and rising

geopolitical tensions in the Middle East, while focus shifted to

the Federal Reserve's policy meeting due later this week.

FUNDAMENTALS

* Spot gold was up 0.5% at $2,397.65 per ounce, as of

0025 GMT. U.S. gold futures climbed 0.7% to $2,396.70.

* The U.S. central bank's Federal Open Market Committee

meets on July 30-31 and is expected to keep rates unchanged at

5.25%-5.50%. However, softer U.S. jobs data in June, cooling

inflation and comments from top Fed officials have prompted the

rate futures market to fully price in a 25 basis-point cut in

September.

* Bullion, historically reputed for its stability as a

favoured hedge against geopolitical and economic risks, thrives

in a low-interest rate environment.

* On the geopolitical front, Israel's security cabinet

authorized Prime Minister Benjamin Netanyahu's government to

decide on the "manner and timing" of a response to a rocket

strike in the Israeli-occupied Golan Heights that killed 12

teenagers and children, and which Israel and the United States

blamed on Lebanese armed group Hezbollah.

* The ADP national employment report and non-farm payrolls

report are the main data points due this week.

* Gold premiums in India jumped to their highest level in a

decade last week, as the government's move to cut import duties

brought down domestic prices, igniting a surge in demand.

* Spot silver gained 0.9% at $28.14 per ounce,

platinum rose 0.9% to $943.40 and palladium was up

1.1% at $909.71.