Dec 5 (Reuters) -
Gold prices rose on Tuesday, as the U.S. dollar and Treasury yields fell after traders slightly pared bets for an interest rate cut by the U.S. Federal Reserve in the first quarter of 2024.
FUNDAMENTALS
* Spot gold was up 0.8% at $2,087.79 per ounce by 0145 GMT. Bullion had surged to an all-time high of $2,135.40 on Monday, before dropping over $100 in a single day to close 2% lower.
* U.S. gold futures for February delivery rose nearly 1% to $2,107.60.
* Gold prices surged in the previous session as investors' confidence was elevated about a rate cut following Fed Chair Jerome Powell's comments on Friday.
* The dollar index fell 0.1% against a basket of currencies, making gold less expensive for other currency holders.
* Yields on 10-year Treasury notes slipped to 4.2587%.
* Lower interest rates reduce the opportunity cost of holding non-interest-bearing bullion.
* However, traders have lowered their rate cut bets by March next year to about 60%, from 70% on early Monday, CME's FedWatch Tool shows.
* The Fed appears on track to end the year with interest rate hikes as a thing of the past, but with a coming challenge over when and how to signal a turn to rate cuts.
* Investors are awaiting the closely-watched U.S. non-farm payrolls data on Friday, which could help further gauge the interest rate outlook.
* Data last week pointed out to cooling inflationary pressures, and a gradually easing labour market, reinforcing the notion of an early rate cut.
* Israeli forces pressed ahead with their air and ground bombardment of southern Gaza Strip, killing and wounding dozens of Palestinians, even as the United States and the United Nations repeatedly urged them to protect civilians.
* Spot silver rose 0.3% to $25.49 per ounce, palladium advanced 0.8% to $1,008.40 per ounce, while platinum edged down 0.2% at $932. DATA/EVENTS (GMT) 0330 Aus RBA Cash Rate Dec 0500 India S&P Global Svcs PMI Nov 0600 Russia S&P Global Svcs PMI Nov 0930 UK Composite PMI Final Nov 1200 Brazil GDP Q3 1445 US S&P Global Svcs PMI Nov 1500 US JOLTS Job Openings Oct (Reporting by Harshit Verma in Bengaluru; Editing by Varun H K)
