Gold holds near record high as Fed minutes fuel rate-cut bets

Gold hovered near all-time highs on Thursday as minutes from the U.S. Federal Reserve’s latest meeting cemented expectations of a September interest rate cut, with traders now awaiting Chair Jerome Powell‘s speech for insights on rate outlook.

FUNDAMENTALS

* Spot gold was flat at $2,511.80 per ounce, as of 0030 GMT, trading below a record high of $2,531.60 hit on Tuesday.

* U.S. gold futures were also flat at $2,548.50.

* Minutes from the Fed’s July 30-31 meeting showed that officials were strongly inclined toward a rate cut next month.

* Traders have fully priced in easing by the Fed at the September meeting, with a 62% chance of a 25 bps cut, according to CME FedWatch tool. A low interest rate environment tends to boost non-yielding bullion‘s appeal.

* The Fed minutes pave the way for the Jackson Hole Economic Symposium starting Thursday, with Fed Chair Jerome Powell set to speak on Friday.
* Additionally, the Bureau of Labor Statistics revised payrolls in the April 2023-March 2024 period to show a 0.5% reduction in jobs, equivalent to 818,000. This was at the higher-end of market estimates of up to one million fewer jobs.
* The market will now be looking for initial jobless claims data due at 1230 GMT.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.07% to 856.70 tonnes on Wednesday.

* Elsewhere, Israel has not agreed to withdraw its troops from the Philadelphi corridor on the Egypt-Gaza border, Prime Minister Benjamin Netanyahu’s office said on Wednesday.

* Spot silver edged 0.2% lower to $29.56 per ounce, platinum gained 0.4% to $967.25 and palladium fell 0.1% to $950.57.

DATA/EVENTS (GMT) 0030 Japan JibunBK Mfg PMI Flash SA August 0030 Japan JibunBK Comp Op Flash SA August 0030 Japan JibunBK SVC PMI Flash SA August 0500 Japan Chain Store Sales YY July 0715 France HCOB Mfg Flash PMI August 0715 France HCOB Services Flash PMI August 0715 France HCOB Composite Flash PMI August 0730 Germany HCOB Composite Flash PMI August 0730 Germany HCOB Services Flash PMI August 0730 Germany HCOB Composite Flash PMI August 0800 EU HCOB Mfg Flash PMI August 0800 EU HCOB Services Flash PMI August 0800 EU HCOB Composite Flash PMI August 0830 UK Flash Composite PMI August 0830 UK Flash Manufacturing PMI August 0830 UK Flash Services PMI August 1230 US Initial Jobless Clm 17 August, w/e 1345 US S&P Global Mfg PMI Flash August 1345 US S&P Global Svcs PMI Flash August 1345 US S&P Global Comp Flash PMI August 1400 EU Consumer Confid. Flash August 1400 US Existing Home Sales July