Gold lingers near two-week high as focus shifts to payrolls data
U.S. sanctions spur central banks' move towards gold -analyst
U.S. nonfarm payrolls report due on Friday
Palladium hit its highest since mid-April on Wednesday
Updates prices and graphic
By Sherin Elizabeth Varghese
July 4 (Reuters) -Gold prices were flat near a two-week high on Thursday after softer-than-expected U.S. economic data spurred hopes of interest rate cuts as early as September, and the market spotlight is now on Friday's non-farm payrolls data.
Spot gold XAU= edged 0.1% higher to $2,358.19 per ounce as of 9:53 a.m. ET (1353 GMT), after prices hit their highest level since June 21 on Wednesday. Most U.S. markets were closed for Independence Day holiday on Thursday.
Bullion prices in the previous session gained more than 1% after a weak services report and ADP employment report on Wednesday depicted a slowing U.S. economy.
"It appears that there's a strong chance that the rate cuts might occur some time in the end of third quarter or early part of the fourth quarter, which just makes gold a lot more attractive than the alternative (which is) bonds," said Alex Ebkarian, chief operating officer at Allegiance Gold.
Lower rates reduce the opportunity cost of holding non-yielding gold.
Minutes of the Fed's June meeting acknowledged the U.S. economy appeared to be slowing and "price pressures were diminishing".
"Long-term wise, we're seeing the sanctions that the U.S. placed (on Russia) inducing a lot of central banks and other governments to move towards gold specifically to eliminate the counterparty and default risk," Ebkarian added.
The sanctions, announced last month, are aimed at cutting off Russia's access to products and services needed to sustain military production for its war in Ukraine.
Traders are now focused on U.S. nonfarm payrolls data, due on Friday. The market is looking for weaker job creation last month, said Ole Hansen, head of commodity strategy at Saxo Bank.
"Together with an expected easing in wage pressure, the precious metal market is likely to react positively should these numbers be confirmed," Hansen added.
Spot silver XAG= fell 0.2% to $30.409 while platinum XPT= rose 1.6% to $1,012.50.
Palladium XPD= was 0.5% down at $1,024.66, after scaling its highest level since mid-April in the previous session.
Spot gold price in USD per oz https://reut.rs/3WaFa4u
Reporting by Sherin Elizabeth Varghese and Daksh Grover in Bengaluru; Editing by David Holmes
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