WASHINGTON (dpa-AFX) - Gold held steady near record levels on Tuesday and the dollar was under pressure due to expectations for more U.S. rate cuts after Fed officials said last week's large interest rate cut was warranted.
Spot gold edged up 0.1 percent to $2,631.06 per ounce while U.S. gold futures were little changed at $2,654.30.
Chicago Fed President Austan Goolsbee said the U.S. is currently on what he calls a 'golden path' and the Fed's half percentage point interest rate reduction last week 'made sense.'
With inflation cooling from historic highs and approaching the central bank's target, he predicts more rate cuts are coming.
Neel Kashkari at the Minneapolis Fed said the balance of risks has shifted away from higher inflation and toward the risk of a further weakening of the labor market, warranting a lower federal funds rate.
His counterpart at the Atlanta Fed, Raphael Bostic also supported the Fed's action last week and agreed policy was too tight for the state of the economy.
Traders have been wagering on nearly three-quarters of a point of policy easing by year end and the upcoming jobs data due later this week may offer more clues on the direction of the economy.
On the geopolitical front, Israel's military said today it struck dozens of Hezbollah targets in southern Lebanon overnight, a day after launching a wave of airstrikes against the Iran-backed group's sites in Lebanon's deadliest day in decades.
Hezbollah said it had attacked several Israeli military targets, including an explosives factory 60 km (37 miles) into Israel, with the Fadi series of rockets.
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