Gold holds steady as US payrolls data grabs limelight
U.S. manufacturing contracts at moderate pace in August
Gold likely to scale new highs in longer term - analyst
Bullion up 21% so far this year
Adds comment, graphic and updates prices
By Ashitha Shivaprasad
Sept 4 (Reuters) -Gold prices held steady on Wednesday as investors braced for a monthly U.S. payrolls report that could influence how swiftly and deeply the Federal Reserve cuts interest rates this year.
Spot gold XAU= held its ground at $2,495.00 per ounce by 0436 GMT. U.S. gold futures GCcv1 rose 0.1% to $2,526.40.
Before the non-farm payrolls report on Friday, job openings data on Wednesday and the ADP employment and jobless claims reports on Thursday will be in focus.
Traders see a 41% chance of a 50-basis-point (bp) rate cut on Sept. 18 and a 59% chance of a 25-bp reduction, according to the CME Group's FedWatch Tool.
"If the jobs data is weak, it will increase the probability of a 50-bp cut and raise worries about growth slowdown, which will be supportive for gold," said Kyle Rodda, a financial market analyst at Capital.com.
"But from a technical viewpoint, positioning is a bit too long for gold and this might limit upside," said Rodda, adding that prices were likely to scale new highs in the longer run, even if there was a pullback in the short-term because of positioning.
Data on Tuesday showed that U.S. manufacturing contracted at a moderate pace in August amid some improvement in employment.
Bullion is considered a safe asset during political and economic uncertainty and tends to thrive in a low rate environment.
So far this year, gold has gained 21%, hitting an all-time high of $2,531.60 on Aug. 20.
Spot silver XAG= fell 0.1% to $28.02 per ounce.
Platinum XPT= gained 0.2% to $905.39 and palladium XPD= rose 0.3% to $941.06. The two metals are primarily used in engine exhausts to reduce emissions.
"In Germany, consumers turning away from BEVs (battery electric vehicles) has resulted in about 50,000 additional sales of catalysed vehicles, which will help to improve palladium demand in the short term," analysts at Heraeus said in a note.
Spot gold price in USD per oz https://reut.rs/3MycLiW
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu
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