Sept 15 (Reuters) - Gold rose to an all-time high on Monday, underpinned by a softer dollar and lower Treasury yields, as investors positioned ahead of a pivotal Federal Reserve meeting this week that could set the tone for the rest of the year.
Spot gold was up 1.1% at $3,680.80 per ounce as of 01:44 p.m. EDT (1744 GMT), after hitting a record high of $3,685.39 earlier in the session. Bullion climbed about 1.6% last week.
U.S. gold futures for December delivery settled 0.8% higher at $3,719.00.
The dollar index (.DXY), fell 0.3% to a one-week low, making gold more attractive for other currency holders, while the benchmark U.S. 10-year Treasury yield edged lower.
Markets are all but certain the Fed will deliver a 25-basis-point rate cut on Wednesday, the first since December, with some still holding out for a larger 50 bps move, according to CME's FedWatch tool, opens new tab.
"Expectations of a 25-basis-point rate cut are largely baked into the cake at this point," said Peter Grant, vice president and senior metals strategist at Zaner Metals, adding that there could be one or two more rate cuts before the year-end.
Gold's next upside targets are $3,700, followed by $3,730 and $3,743 in the short term, Grant said.
Non-yielding bullion, often considered a safe-haven asset during broader uncertainty, tends to perform well in a low interest rate environment.
The Fed meets under unusual pressure, with a leadership dispute and President Donald Trump pushing for greater sway over policy. The Senate has also left the door open for Trump's economic adviser Stephen Miran to join the rate-setting committee in time to vote on Wednesday.
Weekend reports that China may ease gold import and export rules spurred strong buying, with both official and private demand seen as key drivers of bullion's rally, said Tai Wong, an independent metals trader.
Data last week showed U.S. consumer prices rose at their fastest pace in seven months in August, while recent jobs figures have pointed to a weakening labor market, keeping the Fed on track to cut rates. USDIRPR/
Elsewhere, spot silver was up 1.1% at $42.62 per ounce, platinum gained 0.7% to $1,400.77 and palladium lost 0.3% to $1,193.21.
Reporting by Anushree Mukherjee and Sherin Elizabeth Varghese in Bengaluru. Editing by Emelia Sithole-Matarise, Mark Potter and Shinjini Ganguli
