Gold prices were steady on Friday, after rising more than 1% in the previous session, as persistent geopolitical tensions and optimism surrounding U.S. interest rate cuts supported bullion.

 

FUNDAMENTALS

* Spot gold held its ground at $2,426.00 per ounce, as of 0203 GMT, after registering its best day since July 16 on Thursday.

* Bullion, however, headed for a weekly decline and has lost as much as 3% so far on Monday, after investors liquidated positions in tandem with a broader equities selloff.

* U.S. gold futures were flat at $2,465.30.

* Federal Reserve policymakers are increasingly confident that inflation is cooling enough to allow interest rate cuts ahead, and they will take their cues on the size and timing of those rate cuts not from stock market turmoil but from the economic data, according to a shared message of three U.S. central bankers on Thursday.

* Markets see a 55% chance of a 50-basis-points cut in September, according to the CME FedWatch Tool, with an additional cut anticipated in December.

* Non-yielding bullion's appeal tends to shine in a low interest rate environment.

* Data on Thursday showed initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, the largest drop in about 11 months, surpassing economists' expectations of 240,000.

* The killing of senior members of militant groups Hamas and Hezbollah last week raised the possibility of retaliatory strikes by Iran on Israel.

* Spot silver was up 0.3% at $27.65 per ounce and platinum rose 1.1% to $940.80. Both metals were poised for weekly losses.

* Palladium gained 0.61% to $928.264.

DATA/EVENTS (GMT) 0130 China PPI YY July 0130 China CPI YY July 0600 Germany HICP Final YY July (Reporting by Daksh Grover in Bengaluru; Editing by Sherry Jacob-Phillips)