Gold firmed on Thursday as the dollar and Treasury yields retreated on rising bets that U.S interest rate cuts may start as early as September, while investors awaited the U.S. non-farm payrolls data.
Spot gold was up 0.8% at $2,373.31 per ounce as of 0258 GMT, after rising 1% in the previous session.
U.S. gold futures rose 0.7% to $2,392.80.
The dollar index was down 0.2%, hovering around a near two-month low, and benchmark U.S. 10-year Treasury yields lingered near their weakest levels in more than two months. [USD/] [US/]
"Buyers were giving the U.S. dollar the cold shoulder today following the weak ADP in the lead up to the non-farm payrolls data (NFP) which enabled the gold price to prosper," said Tim Waterer, chief market analyst at KCM Trade.
"The fundamental outlook still looks constructive for gold as we move closer towards possible Fed rate cuts in the second half of the year. Though the $2,300 level could come into question on the downside if we get a particularly strong NFP figure."
Hiring by U.S. private employers slid to a four-month low in May, adding to signs the job market is cooling. Markets now look forward to the NFP data on Friday for further clues.
The Federal Reserve 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.
Lower interest rates reduce the opportunity cost of holding non-yielding bullion.
Spot silver rose 1.8% to $30.54 per ounce, platinum was up 1.2% at $1,003.95 and palladium gained 1.2% to $942.75.
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