• Gold advances for the second day on Friday, buoyed by expectations of Fed easing in September.
• US economic data shows deceleration but not enough to stoke recession fears.
• Ongoing Middle East tensions between Israel, Lebanon and Iran keep Gold demand firm.

Gold prices advanced modestly for the second straight day as market participants remain convinced the Federal Reserve (Fed) could begin to ease policy at the upcoming September meeting. This and heightened tensions between Israel, Lebanon and Iran keep bullion bid ahead of the weekend. The XAU/USD trades at $2,432, up by 0.22%.

The latest tranche of economic data from the United States (US) showed the economy is indeed decelerating, but not to reignite fears of a recession. Fears after dismal ISM Manufacturing PMI and July Nonfarm Payrolls (NFP) figures began to dissipate as reflected by US equities printing decent gains late in the New York session.

On Thursday, US Initial Jobless Claims for the week ending August 3 were lower than expected, hinting the jobs market still remains solid despite cooling moderately.

Gold prices remain firm due to the drop in US Treasury bond yields and the Greenback. The US 10-year benchmark note rate is down almost five basis points to 3.944%, while the US Dollar Index (DXY), which measures the buck’s performance against other currencies, falls 0.10% to 103.13.

Analysts at ING suggest that Bullion would remain bullish in the near term. They wrote, “Looking ahead, we believe [G]old should regain its footing once again, amid the ongoing geopolitical uncertainties and expectations of interest rate cuts from the US Fed.”