Gold flat as markets await Fed minutes

Gold prices were flat in early Asian hours on Tuesday as market participants awaited minutes of the U.S. Federal Reserve's last meeting and more economic data for further clarity on policy easing this year.

FUNDAMENTALS

* Spot gold was little changed at $2,643.68 per ounce, as of 0013 GMT. U.S. gold futures fell 0.1% to $2,662.90.

* Markets are awaiting minutes of the Fed's last policy meeting due on Wednesday, followed by the U.S. Consumer Price Index (CPI) report on Thursday and the Producer Price Index (PPI) data on Friday. A slew of Fed officials are also speaking this week.

* After Friday's stronger-than-expected jobs report, traders pulled back from bets for a 50-basis-point rate cut in November. They now see an 86% chance of a 25 bp cut and a 14% chance that the Fed would not cut rates at all, according to the CME's FedWatch tool.

* The report showed that U.S. job gains increased by the most in six months in September and the unemployment rate fell to 4.1%, pointing to a resilient economy.

* St. Louis Fed President Alberto Musalem said he supports more rate cuts as the economy moves forward on a healthy path, while noting that it is appropriate for the central bank to be cautious and not overdo easing monetary policy.

* Gold is considered a hedge against geopolitical uncertainties and tends to thrive in a low interest rate environment.

* In the Middle East, Hezbollah fired rockets at Israel's third-largest city, Haifa, and Israel looked poised to expand its offensive into Lebanon on Monday, one year after the devastating Hamas attack on Israel that sparked the Gaza war.

* China's central bank held back on buying gold for its reserves for a fifth straight month in September, data showed on Monday, mainly due to a surge in prices for the yellow metal.

* Spot silver lost 0.2% to $31.66 per ounce. Platinum rose 0.4% to $976.10 and palladium gained 0.4% to $1,028.00.

• DATA/EVENTS (GMT)

0600 Germany Industrial Output MM Aug
0600 Germany Industrial Production YY SA Aug
1230 US International Trade $ Aug