Gold hovers near record high on US rate-cut expectations

Sept 8 - Gold prices held firm near an all-time high on Monday, inching closer to a key $3,600 level, bolstered by mounting expectations of a U.S. Federal Reserve rate cut this month following a weaker-than-expected jobs report last week.

FUNDAMENTALS
* Spot gold was up 0.1% at $3,588.48 per ounce, as of 0037 GMT. Bullion rose to a record high of $3,599.89 on Friday.
* U.S. gold futures for December delivery fell 0.7% to $3,628.50.
* U.S. job growth weakened sharply in August and the unemployment rate increased to a nearly four-year high of 4.3%, confirming that labor market conditions were softening and sealing the case for a Fed rate cut next week.
* Several Fed officials last week noted that labor market concerns continue to animate their belief that rate cuts lie ahead. Fed Governor Christopher Waller said he believes the central bank should begin lowering rates at its next meeting.
* Traders have fully priced in a 25-basis-point cut at the end of the two-day policy meeting on September 17 with an 8% chance of a jumbo 50 bp rate cut, according to CME FedWatch tool.
* Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
* Focus now shifts to the U.S. inflation report on Thursday that could offer more clarity on the size of the Fed's expected rate cut.
* China's gold reserves stood at 74.02 million fine troy ounces at the end of August, up from 73.96 million at the end of July, as the central bank bought the precious metal for the 10th straight month.
* Gold speculators raised net long positions by 20,740 contracts to 168,862 in the week ended September 2.
* Elsewhere, spot silver eased 0.3% to $40.84 per ounce. Platinum fell 0.1% to $1,371.65 and palladium slipped 0.2% to $1,107.70.