PRECIOUS-Gold hovers near two-week high as weak US jobs data raises rate cut bets

By Anushree Mukherjee and Brijesh Patel

Aug 5 (Reuters) - Gold prices steadied on Tuesday, hovering near a two-week high hit in the last session, as softer U.S. jobs data bolstered hopes of a rate cut in September and weighed on the dollar, and Treasury yields.

Spot gold XAU= was trading at $3,369.25 per ounce, as of 0629 GMT. Bullion hit its highest since July 24 on Monday. U.S. gold futures GCcv1 was unchanged at $3,423.20.

The dollar index .DXY traded near a one-week low, making gold more affordable to holders of other currencies. USD/

The yield on the benchmark 10-year Treasury note US10YT=RR also hit a one-month low. USD/ US/

"Short-term momentum has improved for the bullish side of the story... fundamental narrative supporting gold prices is that the Fed is still in the mode to actually cut rates in September," OANDA senior market analyst, Kelvin Wong, said.

U.S. employment growth was softer than expected in July, while non-farm payroll figures for May and June were revised down by a massive 258,000 jobs, suggesting a deterioration in labour market conditions.

Traders now see a 90% chance of a September rate cut, per the CME FedWatch tool. FEDWATCH

Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.

Meanwhile, U.S. President Donald Trump has again threatened to raise tariffs on U.S. imports of Indian goods over India's Russian oil purchases. New Delhi called his remarks "unjustified" and vowed to protect its economic interests, deepening the trade rift.

Still, gold faces some technical resistance.

"I still do not see traders pushing up aggressively above the $3,450 level unless we have a very clear catalyst for gold price to actually pick up (to above) this level" Wong said.

Elsewhere, spot silver XAG= was steady at $37.38 per ounce, platinum XPT= lost 0.2% to $1,326.20 and palladium XPD= shed 0.3% to $1,203.15.

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