Gold prices eased on Monday amid profit-taking, but recession worries and rising expectations of U.S. interest rate cuts limited further downside.

 

FUNDAMENTALS

* Spot gold was down 0.1% to $2,439.94 per ounce by 0158 GMT. U.S. gold futures rose 0.5% to $2,482.00.

* Data on Friday showed that job growth in July fell short of expectations, with unemployment rising to 4.3%, 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 September 17-18.

* Traders are pricing a more than 70% chance of the U.S. central bank lowering rates by 50 basis points in September compared with an 11.5% 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 United States 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 U.S. military will deploy additional fighter jets and Navy warships to the Middle East, the Pentagon said on Friday, as Washington seeks to bolster defenses following threats from Iran and its allies Hamas and Hezbollah.

* Spot silver was little changed at $28.55 per ounce, platinum fell 0.76% to $950.60 and palladium declined by 0.8% to $884.73.

DATA/EVENTS (GMT, July)

0145 China Caixin Services PMI

0750 France HCOB Serv, Comp PMIs

0755 Germany HCOB Services PMI

0755 Germany HCOB Composite Final PMI

0800 EU HCOB Serv, Comp Final PMIs

0830 UK S&P Global PMI: Comp - Output

0830 UK Reserve Assets Total

1345 US S&P Global Comp, Svcs Final PMIs

1400 US ISM N-Mfg PMI (Reporting by Daksh Grover in Bengaluru; Editing by Janane Venkatraman )