PRECIOUS-Gold edges lower as aggressive rate cut views fizzle

* Fed's Powell could provide cues on near-term policy this
week
* SPDR Gold holdings fell 0.2% on Friday
* China raises gold reserves for seventh straight month in
June

(Updates prices)
By Diptendu Lahiri
July 8 (Reuters) - Gold prices edged lower on Monday as
increasing expectations that the U.S. Federal Reserve will not
aggressively cut interest rates later this month boosted the
dollar, making gold expensive for holders of other currencies.
Spot gold XAU= fell 0.2% to $1,396.56 per ounce at 01:44
p.m. EDT (1744 GMT). U.S. gold futures GCcv1 settled at $1,400
per ounce.
"With the strong jobs report the bets on 50 basis point rate
cuts have dropped from almost 30% to 2%. The fact is that the
runaway projections of interest rate declines are not going to
happen and that's what is hurting gold," INTL FCStone analyst
Edward Meir said.
Stronger than expected jobs data reported on Friday reduced
the likelihood of a steep rate cut at the Fed's July 30-31
meeting and lifted the dollar to three-week highs. USD/
However, the central bank was still expected to cut rates by
a quarter point, given modest wage gains and other economic data
suggesting the U.S. economy was losing steam.
Markets are now looking ahead to Fed Chairman Jerome
Powell's semi-annual testimony to the U.S. Congress on the
economy this week for clues on the near-term outlook for
monetary policy. Gold hit $1,438.63 for the first time in six years last
month and has been trading above key technical levels, supported
by expectations of a rate cut by major central banks and
lingering concerns about the global economy. "Continuing tensions with Iran and headlines about central
banks around the world being strong buyers of the yellow metal
are supporting prices," said David Meger, director of metals
trading at High Ridge Futures.
The Chinese central bank increased its gold reserves for a
seventh straight month in June, data showed. China is the
world's biggest consumer of the yellow metal. Adding to existing tensions between the United States and
Iran, Tehran said on Sunday it will shortly boost its uranium
enrichment above a cap set by a landmark 2015 nuclear deal,
prompting a warning "to be careful" from U.S. President Donald
Trump. Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, fell 0.18% to 796.97 tonnes on
Friday from 798.44 tonnes on Wednesday. GOL/ETF
Among other precious metals, silver XAG= gained 0.4% to
$15.03 per ounce, while palladium XPD= dipped 0.4 % to $1,560
per ounce and platinum XPT= rose 1.6% to $817 per ounce.