Fed Powell signals 25bp rate cuts
Goldman Sachs raises gold price forecast to 2,900
U.S. job openings data due later in the day

Oct 1 Reuters Gold prices rose on Tuesday on safehaven demand due to Middle East tensions and lower U.S. bond yields, although the metal hovered below recent record highs after the Federal Reserve chief signalled smaller rate cuts in the future.

Spot gold was up 0.6 at 2,649.59 per ounce, as of 1057 GMT, after hitting an alltime high of 2,685.42 last Thursday. U.S. gold futures edged 0.4 higher to 2,671.

The benchmark U.S. 10year bond yield slipped on Tuesday, making nonyielding bullion more attractive for investors.

Gold dropped from historical highs due to profittaking and some upside capped by Chinese stimulus measures directing investor flows to China39;s stock market, said Ricardo Evangelista, senior analyst at ActivTrades.

However, the causes of the recent rally, including expectations of lower U.S. interest rates and safehaven demand driven by geopolitical instability, remain intact, Evangelista added.

Israel said intense fighting erupted with Hezbollah in south Lebanon on Tuesday.

Bullion on Monday posted its worst day in over four weeks after Fed Chair Jerome Powell suggested the central bank will likely pursue quarterpercentagepoint rate cuts moving forward.

Lower interest rates reduce the opportunity cost of holding bullion.

Market focus is now on U.S. ADP employment data, due on Wednesday, and the nonfarm payrolls on…