Sept 18 (Reuters) - Gold prices rose on Thursday, buoyed by a softer dollar, after the U.S. Federal Reserve cut interest rates by 25 basis points and signaled a gradual easing path for the rest of the year, boosting the metal's appeal.
Spot gold <XAU=> was up 0.2% at $3,668.34 per ounce as of 1011 GMT. Prices hit a record high of $3,707.40 on Wednesday, before closing 0.8% down. U.S. gold futures for December delivery fell 0.4% to $3,703.
The dollar (.DXY), opens new tab pared recent gains and hovered near a two-month low, making gold less expensive for other currency holders. The benchmark 10-year Treasury yields also fell.
"The dollar is resuming its weakness, which has helped to support gold prices ... the rate decision itself was a little bit on the dovish side, because the statement or the dot plots revealed that there will be two more rate cuts to come this year," said Fawad Razaqzada, market analyst at City Index and FOREX.com.
The Fed reduced rates by 25 basis points on Wednesday and indicated it will steadily lower borrowing costs for the rest of this year.
Fed Chair Jerome Powell characterised the action as a risk-management cut in response to the weakening labor market, and said the Fed is in a "meeting-by-meeting situation" regarding the interest rate outlook.
Non-yielding bullion, considered a safe-haven asset during periods of geopolitical and economic uncertainty, tends to perform well in a low interest-rate environment.
"(Gold's) bull run is still very much in place and we will very much see record highs likely to persist," independent analyst Ross Norman said.
Traders are currently pricing in a 90% chance of another 25-basis point cut at the Fed's next meeting in October, according to the CME Group's FedWatch tool, opens new tab.
ANZ expects gold to outperform early in the easing cycle, the bank said in a note on Thursday. "Demand for haven assets amid the challenging geopolitical backdrop is likely to boost investor demand," it said.
Elsewhere, spot silver rose 0.4% to $41.84 per ounce, platinum gained 1.5% to $1,383.60 and palladium was down 0.7% at $1,146.55/oz.
Reporting by Ishaan Arora, Anushree Mukherjee and Anmol Choubey in Bengaluru Editing by Jan Harvey and Frances Kerry
