GOLD prices eased on Monday (Aug 5) amid profit-taking, but recession worries and rising expectations of United States interest rate cuts limited further downside.
Spot gold was down 0.1 per cent to US$2,439.94 per ounce by 0158 GMT. US gold futures rose 0.5 per cent to US$2,482.00.
Data on Friday showed that job growth in July fell short of expectations, with unemployment rising to 4.3 per cent, pointing to possible weakness in the labour market and greater vulnerability to recession, strengthening the case for a rate cut at the Federal Reserve’s meeting on Sep 17 18.
Traders are pricing a more than 70 per cent chance of the US central bank lowering rates by 50 basis points in September compared with an 11.5 per cent chance a week earlier, according to CME FedWatch tool.
Lower interest rates reduce the opportunity cost of holding the non-yielding bullion.
In other markets, share markets slid and bonds rallied in Asia as fears the US could be heading for recession triggered mass risk aversion.
Gold premiums in India fell last week, as a recovery in prices tempered a buying frenzy led by the government’s decision to ease import tax, while dwindling consumer sentiment weighed on demand in top consumer China.
Elsewhere, the US military will deploy additional fighter jets and Navy warships to the Middle East, the Pentagon said on Friday, as Washington seeks to bolster defences following threats from Iran and its allies Hamas and Hezbollah.
Spot silver was little changed at US$28.55 per ounce, platinum fell 0.76 per cent to US$950.60 and palladium declined by 0.8 per cent to US$884.73. REUTERS
