FUNDAMENTALS
* Spot gold was down 0.2% at $3,386.19 per ounce, as of 0118 GMT, after hitting its highest level since August 11 on Tuesday.
* U.S. gold futures for December delivery edged 0.1% higher to $3,435.70.
* The dollar index rose 0.1% against its rivals, making gold less attractive for other currency holders.
* Trump said he was removing Cook over alleged improprieties in obtaining mortgage loans, a step that could test the boundaries of presidential power over the U.S. Fed.
* In response, Cook said Trump has no authority to fire her from the central bank, and she will not resign.
* Trump has been pushing the U.S. central bank to cut rates and has repeatedly criticised Fed Chair Jerome Powell for acting too slow.
* Last week, Powell signalled a possible rate cut at the Fed’s meeting next month, citing increasing risks to the U.S. labour market.
* Markets are now pricing in an 87% chance of a quarter-point rate cut at the Fed’s September 17 policy meeting, according to CME FedWatch Tool.
* Non-yielding gold typically performs well in a low-interest-rate environment.
* Focus now shifts to the Personal Consumption Expenditures Price Index, the Fed’s preferred inflation gauge, due on Friday for more cues on U.S. rate cut trajectory.
* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.15% to 959.92 tons on Tuesday from 958.49 tons on Monday.
* Elsewhere, spot silver was flat at $38.59 per ounce, platinum gained 0.3% to $1,353.11 and palladium climbed 0.8% to $1,102.50.
