• Gold is up 22% so far in 2024
• Heading for the biggest annual growth since 2020
• Global gold ETFs saw 4th month of inflows in August, says WGC
• Julius Baer keeps 3-month target for gold at $2,500/oz

LONDON, Sept 5 (Reuters) - Gold rose on Thursday, fuelled by wide expectations of a deeper U.S. Federal Reserve rate-cutting cycle starting this month.

Spot gold was up 1.0% at $2,518.92 per ounce by 1221 GMT. The bullion hit a record high of $2,531.60 on Aug. 20.

Gold is supported by a global economic slowdown that has "lifted the prospect for a more aggressive rate-cutting cycle," said Ole Hansen, head of commodity strategy at Saxo Bank.

Investors raised bets on larger-than-previously-expected Fed September rate cut after data showed on Wednesday that U.S. job openings dropped to a 3-1/2-year low in July, suggesting the labour market was losing steam.

The widely expected cut has prompted physically backed gold exchange-traded funds (ETFs) to resume purchases over the last four months.

This comes after three years of outflows when Western safe-haven seekers chose the U.S. Treasury bond market, where yields were high instead of non-yielding gold.

"Now the big question is of course how low the rates are going to go, or how low the yields will go," said Carsten Menke, an analyst at Julius Baer.

"If the Fed cuts the rates, the interest rates will still remain in the restrictive territory - above the neutral rate, and based on that, we don't think that this is going to cause a big wave of buying by Western gold investors."

The precious metal is up 22% so far this year, heading for the biggest annual growth since 2020, amid bets on upcoming U.S. rate cuts, safe-haven demand driven by geopolitical and economic uncertainty, and robust purchases by central banks.

Julius Baer keeps its three- and twelve-month price targets for gold unchanged at $2,500 and $2,600 per ounce, respectively, as it expects the physical demand from the emerging markets to recover.

"This includes Chinese investment demand, which has taken a bit of a pause during summer. With the overall economic backdrop, gold is the only remaining asset which has some sort of appeal to the Chinese investor, so this demand should come back to the market sooner or later," Menke said.

Spot silver gained 1.6% to $28.74, platinum climbed 3.1% to $930.40 and palladium rose 1.3% to $946.50.

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https://www.reuters.com/markets/commodities/gold-lacks-momentum-investors-cautious-ahead-us-jobs-data-2024-09-05/