Gold holds ground as investors await US data for further clues

Gold price held its ground on Tuesday, following a decline of nearly 1% in the previous session, as investors awaited upcoming U.S. data for insights on potential interest rate cuts this year.

FUNDAMENTALS

* Spot gold was steady at $2,635.89 per ounce, as of 0006 GMT. Bullion hit a record high level of $2,685.42 on Thursday.

* U.S. gold futures edged 0.1% lower to $2,657.50.

* Federal Reserve Chair Jerome Powell said on Monday he sees two more interest rate cuts, totaling 50 basis points, this year as a baseline “if the economy performs as expected,” though the Fed could cut faster, or slower, if needed.

* Traders on Monday favored a quarter-point interest rate cut in November over another half-point cut, following Fed Chair Jerome Powell’s remarks that rates will reach a neutral level “over time”. * Meanwhile, Chicago Federal Reserve President Austan Goolsbee reiterated on Monday that he supports significant interest rate cuts based on the current economic conditions and their expected trajectory. * Lower interest rates reduce the opportunity cost of holding bullion, which is also viewed as a safe asset during economic and political turmoil.

* On the geopolitical level, Israel’s anticipated ground invasion of Lebanon began early Tuesday, with its military reporting “limited” raids on Hezbollah targets near the border.

* The market will be closely watching U.S. job openings data later today, as well as remarks from various Fed officials, for more hints.

* Goldman Sachs raised its gold price forecast for early 2025 to $2,900 per ounce, up from $2,700, citing increasing ETF flows due to interest rate cuts in the West and China, as well as higher central bank purchases.

* Spot silver was up 0.2% to $31.22 per ounce, platinum gained 0.5% to $980.80 and palladium was flat at $999.32.

DATA/EVENTS (GMT) 0030 Japan JibunBK Mfg PMI Final SA Sept 0750 France HCOB Manufacturing PMI Sept 0755 Germany HCOB Mfg PMI Sept 0800 EU HCOB Mfg Final PMI Sept 0830 UK S&P Global Manufacturing PMI Sept 0900 EU HICP Flash YY Sept 0900 EU HICP-X F,E,A&T Flash YY Sept 0900 HICP-X F, E, A, T Flash MM Sept 1345 US S&P Global Mfg PMI Final Sept 1400 US ISM Manufacturing PMI Sept.