Gold holds steady amid Middle East turmoil, eyeing US economic data
Thu Oct 03 2024
Gold held steady on Thursday, as traders focused on developments in the Middle East conflict and anticipated key U.S. economic data that may provide clues about the rate cuts expected later in the year.
FUNDAMENTALS
* Spot gold was steady at $2,659.05 per ounce, as of 0034 GMT.
* U.S. gold futures rose 0.4% to $2,679.50.
* According to the ADP National Employment report on Wednesday, U.S. private payrolls increased more than expected in September, further evidence that labor market conditions were not deteriorating.
* The recent half-percentage-point interest rate cut by the U.S. central bank acknowledges that its policy was "out of sync" with the economy, but shouldn't be taken as a sign that the battle with inflation is finished, Richmond Federal Reserve President Thomas Barkin said on Wednesday.
* Expectations for another cut of 50 bps at the November meeting have been decreasing recently, with markets pricing in a 35% chance, down from nearly 53% on Friday, according to CME's FedWatch Tool.
* Lower interest rates reduce the opportunity cost of holding gold, which is also viewed as a safe asset during economic and political turmoil.
* Israel bombed central Beirut in the early hours of Thursday, killing at least six people, after its forces suffered their deadliest day on the Lebanese front in a year of clashes against Iran-backed armed group Hezbollah.
* Investors are attentively watching for the ISM services data and initial jobless claims, which are due later in the day, along with the U.S. nonfarm payroll data expected on Friday.
* Elsewhere, Perth Mint's gold product sales in September surged to a 10-month high, while silver sales also reached a seven-month high, the refiner said on Thursday.
* Spot silver fell 0.3% to $31.76 per ounce, platinum gained 0.3% to $1,005.65 and palladium edged 0.1% up to $1,016.25.