PRECIOUS-Gold eases as dollar strengthens, traders await Fed policy cues

BENGALURU, Oct 28 (Reuters) - Gold prices declined on Monday, pressured by a stronger U.S. dollar, while investors awaited fresh signals regarding the Federal Reserve's monetary policy trajectory. FUNDAMENTALS * Spot gold XAU= fell 0.5% to $2,732.90 per ounce, as of 0057 GMT. Prices hit a record high of $2,758.37 on Wednesday while ending nearly 1% higher last week. * U.S. gold futures GCv1 declined 0.33% to $2,745.30. * The dollar index .DXY gained 0.2%, making gold less appealing for other currency holders, while U.S. bond yields also rose. * Data on Friday showed that U.S. consumer sentiment climbed to a six-month high in October, with the uptick most pronounced among Republicans who grew more confident of a Donald Trump victory. * Elsewhere, Israel's airstrikes "hit hard" Iran's defences and missile production, Prime Minister Benjamin Netanyahu said on Sunday, as Iranian Supreme Leader Ayatollah Ali Khamenei said the country was considering its response. * Bullion thrives in a low interest rate environment and is considered a hedge against political and economic uncertainty. * Markets are pricing in a 94.8% chance for a 25-basis-point cut at the Fed's November meeting, according to CME's FedWatch Tool. * Uncertainty looms as the U.S. approaches Election Day on Nov. 5, with recent polls indicating a fiercely competitive race between Donald Trump and Kamala Harris. * Traders will be closely monitoring the U.S. employment report scheduled for release on Friday, as they seek further insights. * On the physical front, gold demand in India ticked up last week ahead of a key festival but record-high prices discouraged many retail buyers from making their usual festive purchases. GOL/AS * Spot silver XAG= fell 0.4% to $33.57 per ounce, while palladium XPD= rose 0.23% to $1,025.15, platinum XPT= edged 0.2 down to $1,190.97. (Reporting by Daksh Grover in Bengaluru; Editing by Rashmi Aich) ((mailto:[email protected];))