BENGALURU: Gold prices eased on Friday, but were on track for a second straight month of gains on rising bets of a Federal Reserve rate cut next month, while traders awaited key U.S. inflation data for additional guidance.
Spot gold was down 0.3 per cent at US$2,513.99 per ounce as of 0333 GMT, but on track to have increased about 3 per cent this month.
U.S. gold futures fell 0.5 per cent to US$2,547.60.
The "overall trend in gold remains bullish due to lower rates and geopolitical tensions," said Peter Fung, head of dealing at Wing Fung Precious Metals.
"By year-end, prices should break US$2,650 and in the medium to long term, expect it to go above US$2,800 and maybe even US$3,000."
Currently, traders have fully priced in a U.S. rate cut next month, with a 66 per cent chance of a 25-basis-point reduction and a 34 per cent chance of a 50-bps cut, according to the CME FedWatch tool.
Those odds could be influenced by U.S. Personal Consumption Expenditures (PCE) data, due at 1230 GMT.
"The size of a potential September Fed cut could well be influenced by how tame or otherwise the core PCE Price Index is," said Tim Waterer, chief market analyst, KCM Trade.
Data released on Thursday showed U.S. weekly jobless claims fell slightly last week but re-employment opportunities for laid-off workers are becoming more scarce.
On the geopolitical front, the Israeli military and Palestinian militant group Hamas have agreed to three separate, zoned three-day pauses in fighting in the Gaza Strip to allow for polio vaccinations, a senior WHO official said. Tensions have otherwise been high with fears of a widening conflict.
Spot silver slipped 0.2 per cent to US$29.38 per ounce, while palladium rose 0.29 per cent to US$940.40. Both metals are on track for monthly gains.
Platinum edged down by 0.1 per cent to US$978.50, set for a third straight month of losses.