July 30 (Reuters) - Gold fell 1% on Wednesday as solid U.S. economic data reinforced expectations that the Federal Reserve will hold interest rates steady at its meeting later in the day, while also increasing the likelihood that rate cuts may be pushed back for the remainder of the year.
Spot gold was down 1% at $3,292.77 per ounce, as of 11:27 a.m. ET (1527 GMT). U.S. gold futures also fell 1% to $3,288.30.
The ADP National Employment report showed U.S. private payrolls rising more than expected in July, though signs of a slowing labor market persisted. Separately, a Commerce Department report showed second‑quarter GDP grew 3%, beating forecasts of 2.4% in a Reuters poll.
"The releases that just came out really look quite supportive for the economy. GDP was an upside surprise. Same with labor market addition. So both indicate that the Fed can continue to wait on cutting rates," said Nitesh Shah, commodities strategist at WisdomTree.
The U.S. central bank is widely expected to leave rates unchanged, resisting pressure from U.S. President Donald Trump's repeated calls for cuts. Traders see a 60% chance of the Fed cutting rates in September versus 66% before the data.
Market participants will be parsing Fed Chair Jerome Powell's comments that are due at 2:30 p.m. ET (1830 GMT) for any nuance on the timing and trajectory of policy shifts.
Shah noted that the louder the Trump administration voices its distaste for current policymaking, the more likely it is to drive gold prices.
Gold tends to perform well in a low-interest rate environment and during periods of uncertainty.
On the trade front, the U.S. and China agreed to extend their 90‑day tariff truce, pending Trump's approval, following two days of what were described as constructive talks in Stockholm.
Spot silver fell 1.8% to $37.52 per ounce, platinum lost over 3.6% to $1,344.33, and palladium was down 2.3% to $1,229.72.
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Vijay Kishore and Rod Nickel
