Gold steady as US payrolls data takes centre stage

Gold prices held steady on Wednesday as investors braced for a monthly U.S. payrolls report that could influence the size of a likely interest rate cut this month.

FUNDAMENTALS

* Spot gold held its ground at $2,493.62 per ounce, as of 0025 GMT. U.S. gold futures edged 0.1% higher to $2,524.90.


* The U.S. non-farm payrolls report is due on Friday. Economists polled by Reuters are looking for a 160,000 increase in U.S. non-farm payrolls in August and a dip in the unemployment rate to 4.2%.

* Traders see a 38% chance of a 50-basis-point (bp) cut by the U.S. Federal Reserve on Sept. 18 and a 62% chance of a 25 bp cut, according to the CME Group's FedWatch Tool.

* Data on Tuesday showed that U.S. manufacturing contracted at a moderate pace in August amid some improvement in employment, but a further decline in new orders and rise in inventory suggested factory activity could remain subdued for a while.

* Fed Chair Jerome Powell last month said "the time has come" to reduce borrowing costs, given that price pressures have eased considerably and the labor market has cooled.

* A low interest rate environment tends to boost non-yielding bullion's appeal.

* Market will also keep a tab on U.S. job openings data later in the day, along with ADP employment report and jobless claims print on Thursday.

* Bullion is heading for its best year since 2020, driven by investor optimism about upcoming U.S. rate cuts and lingering concerns about the Middle East conflict.

* Israeli forces killed at least 35 Palestinians across Gaza on Tuesday as they battled Hamas-led militants, Palestinian officials said.

* Spot silver was flat at $28.04 per ounce, platinum gained 0.4% to $906.55 and palladium added 0.6% to $943.60.

DATA/EVENTS (GMT)

0030 Japan JibunBK Comp Op Final SA August

0030 Japan JibunBK SVC PMI Final SA August

0145 China Caixin Services PMI August

0745 France HCOB Composite PMI August

0750 France HCOB - Services PMI August

0750 France HCOB Composite PMI August

0755 Germany HCOB Services PMI August

0750 Germany HCOB Composite Final PMI August

0800 EU HCOB Services Final PMI August

0800 EU HCOB - Composite Final PMI August

0830 UK S&P Global PMI: Composite - Output August

0830 UK Reserve Assets Total August

1230 US International Trade $ July

1400 US Factory Orders MM July