Gold prices rose in early trading on Thursday, recording their highest levels in a week, as weak US economic data increased, which increased the chances of the Federal Reserve cutting interest rates this year.
Update prices
Spot gold was up 0.3 percent at $2,333.62 an ounce by 0329 GMT, after hitting its highest since June 12 earlier in the session.
U.S. gold futures were unchanged at $2,347.30.
I remain bullish on the gold market given where we are on the interest rate curve, which is currently at its highest, said Tim Waterer, chief market analyst at KCM Trade.
He added that there seems to be some relief in the gold market about consolidating recent gains rather than recording a rally at this point, at least until we see some further evidence of deteriorating US macroeconomic data, which could change interest rate expectations.
Data last week showed moderation in the labor market and price pressures, followed by weak retail sales data on Tuesday, suggesting economic activity remained lackluster in the second quarter.
The Federal Reserve is looking for more evidence that inflation is cooling, as policymakers cautiously move toward what most expect to be one or two interest rate cuts by the end of this year.
Lower interest rates reduce the opportunity cost of holding non-yielding gold.
Among other precious metals, spot silver rose 1.3 percent to $30.13 an ounce, platinum rose 0.2 percent to $982.05, and palladium advanced 0.4 percent to $908.28.
