Gold prices poised for monthly gain; focus on US data

Gold prices were little changed on Friday, but were poised for a monthly gain on prospects of a U.S. interest rate cut in September, while traders awaited key U.S. inflation data for further insights.

FUNDAMENTALS

* Spot gold was down 0.1% at $2,517.91 per ounce, as of 0037 GMT, and was on track to log its second consecutive monthly gain, rising about 3%.

* U.S. gold futures fell 0.4% to $2,551.20.

* U.S. gross domestic product grew at a 3.0% annualized rate last quarter, up from 2.8% rate reported last month, while consumer spending rose to 2.9%, revised from 2.3%.

* A separate report showed weekly initial jobless claims slipped to 231,000 last week, slightly below the 232,000 estimate of economists polled by Reuters.

* Traders have fully priced in a Federal Reserve rate easing next month, with a 66% chance of a 25-basis-point cut and about 34% chance of a bigger 50-bp reduction, according to the CME FedWatch tool.
* Market participants are now on the watch-out for Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, due later in the day to assess the central bank’s policy outlook.
* Israel told the U.S. that an initial review found that shots were fired at a World Food Programme vehicle in the Gaza Strip after a “communication error” between Israeli military units.

* Bullion is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low-interest-rate environment.

* Elsewhwere, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.13% to 857.27 metric tons on Thursday.

* Spot silver edged 0.1% lower to $29.41 per ounce, and palladium was flat at $979.95, both metals on track for monthly gains.

* Platinum edged up by 0.1% to $938.50 and was down about 3.7% for the month.

DATA/EVENTS (GMT) 0600 UK Nationwide House Price MM August 0600 UK Nationwide House Price YY August 0645 France GDP QQ Final Q2 0645 France CPI (EU Norm) Prelim YY August 0645 France CPI (EU Norm) Prelim MM August 0645 France CPI Prelim YY NSA August 0645 France CPI Prelim MM NSA August 0645 France Producer Prices YY July 0755 Germany Unemployment Chg SA August 0755 Germany Unemployment Rate SA August 0900 EU HICP Flash YY August 0900 EU HICP-X F,E,A&T Flash YY August 0900 EU HICP-X F, E, A, T Flash MM August 0900 EU Unemployment Rate July 1230 US Consumption, Adjusted MM July 1230 US Core PCE Price Index MM July 1230 US Core PCE Price Index YY July 1230 US PCE Price Index MM July 1230 US PCE Price Index YY July 1300 US U Mich Sentiment Final August.