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Gold struggles for direction as markets weigh Fed pause bets

Gold prices were muted on Tuesday as investors awaited more cues on the health of the U.S. economy ahead of the Federal Reserve’s meeting this month amid rising expectations for a pause in interest rate hikes.

FUNDAMENTALS

* Spot gold was flat at $1,937.58 per ounce by 0058 GMT, off one-month highs hit on Friday. U.S. gold futures fell 0.2% to $1,963.40 as a holiday in the United States kept trading activity limited on Monday.

* The U.S. dollar index was down 0.1% against its peers.

* Investor morale in the euro zone fell more than expected at the start of September as Germany’s economic weakness remained a major drag on the region, a survey showed on Monday.

* Central banks across major developed and emerging economies took a breather in August with the pace and scale of interest rate hikes shifting another gear lower as diverging growth outlooks and inflation risks muddied the outlook ahead.
* The Bank of Japan (BOJ) will be able to gradually shift away from its easy monetary policy only after ensuring its 2% inflation goal has been sustainably achieved, former board member Goushi Kataoka said on Monday. * Country Garden’s deal with creditors for an extension on onshore debt payments worth 3.9 billion yuan ($536 million) boosted shares in the developer on Monday and gave China’s crisis-ridden property sector some much-needed respite.

* Elsewhere, spot silver was down 0.1% at $23.94 per ounce, platinum dipped 0.6% to $948.20 and palladium was flat at $1,221.45.

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