Oct 3 (Reuters) - Gold held steady on Thursday, as traders focused on developments in the Middle East conflict and anticipated key U.S. economic data that may provide clues about the rate cuts expected later in the year.

FUNDAMENTALS

* Spot gold was steady at $2,659.05 per ounce, as of 0034 GMT.

* U.S. gold futures rose 0.4% to $2,679.50.

* According to the ADP National Employment report on Wednesday, U.S. private payrolls increased more than expected in September, further evidence that labor market conditions were not deteriorating.

* The recent half-percentage-point interest rate cut by the U.S. central bank acknowledges that its policy was "out of sync" with the economy, but shouldn't be taken as a sign that the battle with inflation is finished, Richmond Federal Reserve President Thomas Barkin said on Wednesday.

* Expectations for another cut of 50 bps at the November meeting have been decreasing recently, with markets pricing in a 35% chance, down from nearly 53% on Friday, according to CME's FedWatch Tool.

* Lower interest rates reduce the opportunity cost of holding gold, which is also viewed as a safe asset during economic and political turmoil.

* Israel bombed central Beirut in the early hours of Thursday, killing at least six people, after its forces suffered their deadliest day on the Lebanese front in a year of clashes against Iran-backed armed group Hezbollah.

* Investors are attentively watching for the ISM services data and initial jobless claims, which are due later in the day, along with the U.S. nonfarm payroll data expected on Friday.

* Elsewhere, Perth Mint's gold product sales in September surged to a 10-month high, while silver sales also reached a seven-month high, the refiner said on Thursday.

* Spot silver fell 0.3% to $31.76 per ounce, platinum

gained 0.3% to $1,005.65 and palladium edged 0.1% up to $1,016.25.

DATA/EVENTS (GMT) 0030 Japan JibunBK Comp Op Final SA Sept 0030 Japan JibunBK SVC PMI Final SA Sept 0750 France HCOB - Services PMI Sept 0750 France HCOB - Composite PMI Sept 0755 Germany HCOB Services PMI Sept 0755 Germany HCOB Composite Final PMI Sept 0800 EU HCOB Services Final PMI Sept 0800 EU HCOB - Composite Final PMI Sept 0830 UK S&P Global PMI: Composite - Output Sept 0830 UK Reserve Assets Total Sept 0900 Germany Overall Comprehensive Risk Q4 0900 France Overall Comprehensive Risk Q4 0900 UK Overall Comprehensive Risk Q4 1230 US Initial Jobless Clm 28 Sep, w/e 1345 US S&P Global Comp Final PMI Sept 1345 US S&P Global Svcs PMI Final Sept 1400 US Factory Orders MM Aug 1400 US ISM N-Mfg PMI Sept

(Reporting by Daksh Grover in Bengaluru; Editing by Alan Barona)

((Daksh.Grover@thomsonreuters.com))