June 6 (Reuters) –Gold prices rose on Thursday, building on the previous session’s gains as investors expected US non-farm payrolls data that could determine whether interest rates will be cut earlier than expected this year.
FUNDAMENTALS
* Spot gold XAU= was up 0.4% at $2,365.40 per ounce, as of 0121 GMT, after a more than 1% gain on Wednesday. US gold futures GCcv1 rose 0.4% to $2,384.50.
* The dollar index inched down 0.1%, while benchmark US 10-year Treasury yields US10YT=RR lingered near a two-month low, making bullion more attractive to investors. USD/ US/
* US private payrolls increased less than expected in May, while data for the prior month was revised lower.
* Investors now await the non-farm payrolls data due on Friday to gauge the US economy’s health and whether it will deter the Federal Reserve from cutting rates in September.
* The Fed will cut its key interest rate in September and once more this year, according to a majority of forecasters in a Reuters poll that also showed a significant risk they opt for only one or none at all.
* Traders are currently pricing in about a 70% chance of a rate cut in September, according to CME FedWatch tool.
* Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
* Meanwhile, the European Central Bank was all but certain to cut rates from record highs and was likely to acknowledge that it had made progress in its battle against high inflation, while also stressing the fight was not yet over.
* Russia’s finance ministry said it would reduce its purchases of foreign currency and gold In the month ahead, a move that will increase the state’s overall forex sales.
*Spot silver XAG= rose 1.2% to $30.36 per ounce, platinum XPT= was up 0.9% at $1,001.70 and palladium XPD= gained 1.1% to $941.25.
DATA/EVENTS (GMT)
0600 Germany Industrial Orders MM April
0600 Germany Manufacturing O/P Cur Price SA April
0600 Germany Consumer Goods SA April
0830 UK S&P Global PMI: MSC Comp – Output May
1215 EU ECB Refinancing Rate June
1215 EU ECB Deposit Rate June
1230 US International Trade April
1230 US Initial Jobless Clm Weekly
Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Subhranshu Sahu
