Gold prices edged lower on Wednesday as the U.S. dollar and Treasury yields firmed, while bets of a September rate cut from the Federal Reserve limited further losses.

 

FUNDAMENTALS

* Spot gold was down 0.2% at $2,385.23 per ounce, as of 0155 GMT. U.S. gold futures fell 0.3% to $2,425.50.

* The dollar recovered ground, making bullion more expensive for other currency holders. While, the benchmark U.S. 10-year Treasury yields edged higher.

* Markets see a 70% chance of 50-basis-point cut in September, according to the CME FedWatch Tool. Zero-yield gold tends to thrive in a low interest rate environment.

* On Monday, Fed policymakers pushed back against the notion that weaker-than-expected July jobs data means the economy is in recessionary freefall, but also warned that rate cuts will be needed to avoid such an outcome.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.37% to 848.06 tonnes on Tuesday from 844.90.

* On the geopolitical front, the United States has communicated to Iran and Israel that conflict in the Middle East must not escalate, Secretary of State Antony Blinken said on Tuesday, even as the Pentagon warned that it would not tolerate attacks against its forces in the region.

* Spot silver shed 0.2% to $26.99 per ounce, platinum rose 0.31% to $914.90 and palladium gained 0.13% to $875.77.

 

DATA/EVENTS (GMT) 0600 Germany Industrial Output MM June 0600 Germany Industrial Production YY SA June 0600 UK Halifax House Prices MM July 0600 UK Halifax House Prices YY July 0645 France Reserve Assets Total July

 (Reporting by Daksh Grover in Bengaluru; Editing by Sherry Jacob-Phillips)