Gold prices held steady on Tuesday (August 5), near a more than one-week high reached in the last session, as weaker US employment data reinforced expectations of a Federal Reserve interest rate cut in September, weighing on the dollar and government bond yields.

Spot gold was steady at $3,371.40 per ounce at 04:32 GMT. Bullion hit its highest level since July 24 on Monday. US gold futures were unchanged at $3,425.30.

The dollar index traded near a one-week low, making gold more affordable for holders of other currencies. The yield on the 10-year US government bond also hit a one-month low.

"Short-term momentum has improved on the bullish side of the story... the fundamental narrative supporting gold prices is that the Fed is still on track to actually cut interest rates in September," said Kelvin Wong, senior market analyst at OANDA.

US job growth was lower than expected in July, while non-farm payrolls for May and June were revised down by 258,000 jobs, indicating worsening labor market conditions.

Traders now see a 92% chance of a September rate cut, according to the CME FedWatch tool.

Gold, traditionally considered a safe-haven asset during times of political and economic uncertainty, tends to thrive in a low-interest rate environment.

Meanwhile, US President Donald Trump again threatened to raise tariffs on Indian goods over purchases of Russian oil. New Delhi called his remarks "unwarranted" and vowed to protect its economic interests, deepening the trade rift.

However, gold faces some technical resistance. "I still don't see traders pushing gold prices aggressively above $3,450 unless we have a very clear catalyst for gold prices to actually reach this level," Wong said.

Elsewhere, spot silver fell 0.1% to $37.37 an ounce, platinum fell 0.4% to $1,324.05, and palladium fell 0.4% to $1,201.47. (alg)

Source: Reuters