Gold rises as Fed rate cut bets pressure dollar, yields

Gold prices rose on Tuesday, after gaining in the last three sessions, supported by a weaker U.S. dollar and lower Treasury yields following last week’s weak U.S. jobs data that boosted expectations of a Federal Reserve rate cut in September.

FUNDAMENTALS

* Spot gold rose 0.2% to $3,380.61 per ounce as of 0052 GMT. U.S. gold futures also gained 0.2% to $3,434.30.

* The dollar index fell for the third straight session on Tuesday, making gold more affordable for holders of other currencies. Meanwhile, the yield on the benchmark 10-year Treasury note dropped to a three-week low.

* On Friday, U.S. President Donald Trump fired Erika L. McEntarfer, the commissioner of the U.S. Bureau of Labor Statistics, after data showed employment growth was weaker than expected last month.* U.S. employment growth was softer than expected in July, while the non-farm payrolls counts for May and June were revised down by a massive 258,000 jobs, suggesting a sharp deterioration in the labor market conditions.
* San Francisco Fed Bank President Mary Daly said on Monday that given mounting evidence that the U.S. job market is softening and no signs of persistent tariff-driven inflation, the time is nearing for rate cuts.
* According to the CME FedWatch tool, traders now see an 94.4% chance of a September rate cut.
* Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.18% to 954.80 tonnes on Monday from 953.08 tonnes on Friday.

* Elsewhere, spot silver rose 0.1% to $37.41 per ounce, platinum gained 0.1% to $1,330.17 and palladium eased 0.1% to $1,204.87. DATA/EVENTS (GMT) 0145 China Caixin Services PMI July 0750 France HCOB – Services, Composite PMI July 0755 Germany HCOB Services, Composite Final PMI July 0800 EU HCOB – Composite, Services Final PMI July 0830 UK S&P GLOBAL PMI: COMPOSITE – OUTPUT July 0830 UK Reserve Assets Total July 1230 US International Trade $ June 1345 US S&P Global Comp, Svcs PMI Final July 1400 US ISM N-Mfg PMI July.