Gold holds ground near record high as rate-cut bets build

Gold prices were little changed on Wednesday, but held near a record high hit last week on prospects of imminent U.S. rate cuts and safe-haven demand fuelled by the Middle East crisis.

FUNDAMENTALS

* Spot gold was flat at $2,524.88 per ounce, as of 0033 GMT. Bullion hit a record high of $2,531.60 on Aug. 20.

* U.S. gold futures rose 0.3% to $2,560.20.

* Members of the boards of directors overseeing the Chicago and New York Federal Reserve banks voted in favour of lowering by a quarter percentage point the central bank’s discount rate during July, meeting minutes showed.

* Traders have fully priced in a Fed easing for next month, with a 67% chance of a 25-basis-point cut and about 33% chance of a bigger 50-bp reduction, according to the CME FedWatch tool.

* Meanwhile, an Israeli air strike hit a pickup truck travelling in northeast Lebanon late on Tuesday, two security sources told Reuters, with one of the sources saying it carried military equipment.
* Bullion is considered a hedge against geopolitical and economic uncertainties and tends to thrive in a low-interest-rate environment.
* Elsewhere, U.S. consumer confidence rose to a six-month high in August amid optimism over the economic outlook.

* Investors now await the Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge, scheduled for Friday.

* Spot silver was little changed at $29.99 per ounce, platinum gained 0.6% to $959.21 and palladium climbed 0.2% to $971.95.

DATA/EVENTS (GMT) 1000 France Unemp Class-A SA July.