Gold hovers near 2-week high as weak data fuels US rate cut bets
Palladium down over 1%
U.S. nonfarm payrolls (NFP) report due on Friday
Gold could hit $2,400 if NFP confirms economic cracks - analyst
Updates prices
By Ashitha Shivaprasad
July 4 (Reuters) - Gold prices eased on Thursday but hovered near a two-week high hit in the previous session after softer-than-expected U.S. economic data fuelled hopes that the Federal Reserve could cut interest rates as soon as September.
Spot gold XAU= fell 0.1% at $2,353.14 per ounce, as of 0637 GMT after hitting highest level since June 21 in the previous session . U.S. gold futures GCcv1 lost 0.3% at $2,363.10.
U.S. economic data on Wednesday, including weak services and ADP employment reports, showed a slowing economy. A separate report showed an increase in initial applications for U.S. unemployment benefits last week.
Traders are now looking out for U.S. nonfarm payrolls (NFP) data, due on Friday.
"A softer-than-expected ISM services report was the gift that Fed doves have been waiting for ahead of a NFP. A move to $2,400 is on the cards should NFP confirm the economic cracks we're seeing elsewhere," said Matt Simpson, senior analyst at City Index.
"I doubt we’ll be seeing the U.S. dollar index retest 106 any time soon, so we expect traders to fade into dollar bounces and buy dips on gold." USD/
Markets are now pricing in a 73% chance of the Fed cutting interest rates at its September meeting, according to the CME FedWatch Tool.
Lower rates reduce the opportunity cost of holding non-yielding gold.
Meanwhile, Fed officials at their last meeting acknowledged that the U.S. economy appeared to be slowing but still counselled a wait-and-see approach before committing to rate cuts, according to minutes from the June 11-12 session.
Spot gold may test support zone of $2,346-$2,352, a break below which could be followed by a drop into the range of $2,329-$2,340, according to Reuters' technical analyst Wang Tao. TECH/C
Spot silver XAG= slipped 0.7% to $30.27 while platinum XPT= added 0.7% at $1,004.10.
Palladium XPD= fell 1.5% to $1,014.02after scaling its highest level since mid-April in the previous session.
Spot gold price in USD per oz https://reut.rs/3RW7HrP
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich, Sonia Cheema and Janane Venkatraman
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