PRECIOUS-Gold cuts losses as dollar rally pauses, US data in focus

By Brijesh Patel

Nov 4 (Reuters) - Gold prices trimmed losses on Tuesday, helped by a pause in the dollar's rally and lower Treasury yields, while investors waited for U.S. economic data due this week for more cues on the interest rate path.

Spot gold XAU= was down 0.1% at $3,996.68 per ounce, as of 0839 GMT, after declining 0.9% earlier in the session. U.S. gold futures GCcv1 for December delivery eased 0.2% to $4,007.70 per ounce.

"Gold is consolidating in the region of $4,000 and the next few weeks will be crucial for understanding if there's space for more rally or we see a correction," said Carlo Alberto De Casa, external analyst at banking group Swissquote.

"We're seeing a stronger U.S. dollar and growing expectation for a cut in December going down. Also, yields are going up and this is affecting gold."

The dollar index .DXY eased after hitting a three-month high against its rivals, making gold less expensive for other currency holders. Benchmark U.S. 10-year yields US10YT=RR retreated from a three-week high on Monday. USD/

The U.S. Federal Reserve last week cut interest rates for the second time this year, but Chair Jerome Powell said another reduction this year was "not a foregone conclusion".

Market participants now see a 65% chance of another rate cut in December, down from over 90% prior to Powell's remarks, as per CME's FedWatch Tool.

Non-yielding gold thrives in a low-interest-rate environment and during times of economic uncertainty.

Investors now eagerly await the release of ADP U.S. employment data, due on Wednesday, and ISM PMIs this week for cues on rate cuts.

Bullion, which has gained 53% so far this year, has fallen nearly $400 since scaling an all-time peak of $4,381.21 on October 20.

"In the past couple of weeks, several key levels have been breached, most notably the psychological $4,000 barrier. The initial break below that level triggered a wave of technical selling and the unwinding of long positions," Fawad Razaqzada, market analyst at City Index and FOREX.com, said in a note.

Elsewhere, spot silver XAG= was steady at $48.04 per ounce, platinum XPT= eased 0.3% to $1,561.15 and palladium XPD= fell 1.9% to $1,417.02.

Reuters Terminal users can see related news and prices by clicking on the codes in brackets:
All precious metals headlines           GOL
Precious metals market reports          GOL/
European gold prices                    GOLD/EU1GOLD/EU20#PREC
London Bullion Market Association       LBMA01
New York Comex gold 0#GC: and silver  0#SI:
New York platinum 0#PL: and palladium 0#PA: