Gold trades near record highs on US rate cut bets; silver at 14-year high

The US dollar was trading near its lowest since July 28 against rivals, making greenback-priced bullion cheaper for overseas buyers.

Gold hit a more than four-month high on Monday to trade around $30 shy of all-time highs, buoyed by U.S. Federal Reserve rate cut bets and a softer dollar, while silver breached $40 per ounce for the first time since 2011.

Spot gold was up 0.7% at $3,469.84 per ounce by 1049 GMT, its highest since April 22 when it touched a record-high of $3,500.05. U.S. gold futures for December delivery gained 0.8% to $3,542.80.

Spot silver jumped 2.3% to $40.60 per ounce, its highest since September 2011.

The U.S. dollar was trading near its lowest since July 28 against rivals, making greenback-priced bullion cheaper for overseas buyers. [USD/]

"Gold, and especially silver, extended Friday's strong gains, supported by sticky U.S. inflation, weakening consumer sentiment, (expected) rate cuts ... and concerns over Fed independence," Saxo Bank's head of commodity strategy, Ole Hansen, said.

The U.S. personal consumption expenditures price index rose 0.2% month-on-month and 2.6% year-on-year, in line with expectations, data showed on Friday.

"Silver is making a move higher in response to expectations of lower rates, while a tight supply market is helping to maintain an upward bias," KCM Trade's chief market analyst, Tim Waterer, said.

In a social media post last week, San Francisco Federal Reserve Bank President Mary Daly reiterated her support for a rate cut, citing labour market risks.

"The market is watching for Friday's U.S. job market report, anticipating that this would allow the Fed to resume rate cuts from September onwards (given) this supports investment demand," said UBS analyst Giovanni Staunovo.

The August non-farm payrolls, due Friday, are expected to have grown by 78,000 jobs, a Reuters poll showed, versus 73,000 in July.

Non-yielding gold typically performs well in a low-interest-rate environment.

Meanwhile, U.S. Trade Representative Jamieson Greer said on Sunday that President Donald Trump's administration was continuing talks with trade partners despite a U.S. court ruling that most of the tariffs are illegal.

Elsewhere, platinum gained 1.9% to $1,389.93 and palladium added 0.9% to $1,119.07.