Gold holds firm near record high on US rate-cut expectations

[BENGALURU] Gold held steady on Thursday (Sep 4), hovering near all-time high hit in the previous session, buoyed by global uncertainties and increased expectations for a US interest rate cut, while investors looked forward to a key US jobs data due this week.

Spot gold held its ground at US$3,561.97 per ounce, as at 8.59 am. Bullion hit a record high of US$3,578.50 on Wednesday.

US gold futures for December delivery eased 0.4 per cent to US$3,619.40.

The US Labor Department said on Wednesday that job openings, a measure of labour market demand, fell more than expected to 7.2 million in July.

Several Fed officials said that labour market concerns continue to animate their belief that rate cuts lie ahead. Fed governor Christopher Waller said he thinks the central bank should be cutting at its next meeting.

Atlanta Fed president Raphael Bostic reiterated his view that a rate cut is in the cards, although he did not say how soon it might happen.

Traders are currently pricing in a 97 per cent chance of a 25-basis-point rate cut at the end of the US Federal Reserve two-day policy meeting on Sep 17, up from 92 per cent before the data, according to CME Group’s FedWatch tool.

Non-yielding gold typically performs well in a low-interest-rate environment.

Focus now shifts to the US non-farm payrolls data due on Friday. The August non-farm payrolls are expected to have grown by 78,000 jobs, according to a Reuters poll, versus 73,000 in July.

Meanwhile, President Donald Trump said on Wednesday that the US might have to “unwind” trade deals it reached with the European Union, Japan and South Korea, among others, if it loses a Supreme Court tariffs case, and warned that a loss would cause the US “to suffer so greatly”.

Elsewhere, spot silver was flat at US$41.19 per ounce. Platinum gained 0.2 per cent to US$1,423.63 and palladium fell 0.6 per cent to US$1,140.50. REUTERS