Gold prices flat as profit-taking counters US rate outlook
Shafaq News/ Prices of safe-haven gold were flat on Monday as someprofit-taking partially offset support from U.S. recession jitters and risingexpectations of a September rate cut from the Federal Reserve.
Spot gold held its ground at $2,443.44 per ounce, as of 0335 GMT, afterfalling 1% earlier in the session.
U.S. gold futures rose 0.7% to $2,485.80.
"There is some profit-taking happening while traders try and gaugehow aggressive the Fed may become in September with regards to the size of therate cut," said Tim Waterer, chief market analyst, KCM Trade.
However, "the fundamental picture (for gold) hints at further gainsgiven the expectations for dovish U.S. monetary policy."
Data on Friday showed that U.S. job growth in July fell short ofexpectations, with the unemployment rate rising to 4.3%, pointing to possibleweakness in the labour market and greater vulnerability to recession. Thisstrengthened the case for a rate cut at the Federal Reserve's meeting on Sept.17-18.
Traders are pricing a more than 70% chance of the U.S. central banklowering rates by 50 basis points in September, compared with an 11.5% chance aweek earlier, according to CME FedWatch tool.
Lower interest rates reduce the opportunity cost of holding a non-yieldingbullion.
Meanwhile, on Friday, Richmond Federal Reserve President Thomas Barkinmaintained a cautious outlook, stating he is not ready to adjust his monetarypolicy.
Investors will keep a tab on final July S&P Global services and ISMnon-manufacturing PMI due later in the day.
Elsewhere, the Pentagon announced on Friday that the U.S. military willdeploy additional fighter jets and Navy warships to the Middle East tostrengthen defence against threats from Iran and its allies, Hamas and Hezbollah.
Spot silver was flat at $28.52 per ounce, platinum fell 0.5% to $953.25and palladium was almost unchanged at $889.98.
(Reuters)
