Gold marches towards record highs as Powell endorses rate cuts
Demand from central banks despite record high prices -analyst
India's gold duty cut likely to spark buying spree
Odds of 25 bp rate US rate cut in Sept at 65% - CME FedWatch
Updates prices and graphic as of 1159 GMT
By Sherin Elizabeth Varghese
Aug 26 (Reuters) -Gold held near record highs on Monday, buoyed by a softer dollar and dovish remarks from U.S. Federal Reserve Chair Jerome Powell bolstering expectations of a September interest rate cut.
Spot gold XAU= was up 0.6% to $2,526.15 per ounce at 1159 GMT, about $5 shy of the record high of $2,531.60 hit last week. U.S. gold futures GCcv1 also gained 0.6% to $2,561.90.
The dollar =USD hit its lowest in more than a year, making gold less expensive for other currency holders. USD/
Powell strongly signalled the potential for U.S. rate cuts, indicating that upcoming economic data would determine their pace and scale, which could boost gold investment demand, UBS analyst Giovanni Staunovo said.
Powell on Friday endorsed an imminent start to rate cuts, saying further cooling in the job market would be unwelcome.
Traders have fully priced in a cut for next month, with a 65% chance of a 25 basis point (bp) reduction and a 35% chance of a 50 bp cut, according to the CME FedWatch tool.
A low interest rate environment tends to boost non-yielding bullion's appeal.
"Central banks purchases are linked to a mandate to buy a specific amount of gold over a specific time frame ... fears of sanctions, geopolitics, ballooning debts, are likely to keep demand from central banks supported despite record high prices, in my view," Staunovo said.
India's gold demand during the upcoming festive season is likely to remain robust as a substantial reduction in import duty has made prices appealing, industry officials said.
Gold demand inChina is expected to improve in coming months as consumers adjust to higher prices, industry officials said.
Spot silver XAG= rose 1% to $30.11.
"Sluggishness in global industrial production has capped (the) upside for silver, while it has not benefited from the geopolitical risk premium aiding gold," analysts at Heraeus said in a note.
"However, with interest rate cuts now firmly on the horizon, silver could begin to rise with gold."
Platinum XPT= gained 0.8% to $970.76 and palladium XPD= eased 0.3% to $960.03.
Spot gold price in USD per oz https://reut.rs/3AEY0bu
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mark Potter and Louise Heavens
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