July 4 (Reuters) - Gold prices drifted higher on Thursday, after softer-than-expected U.S. economic data added to hopes that the Federal Reserve could cut interest rates in September.
FUNDAMENTALS
* Spot gold rose 0.1% at $2,357.59 per ounce, as of 0030 GMT after hitting a near two-week high in the previous session. U.S. gold futures lost 0.2% to $2,365.50.
* Data on Wednesday showed that first-time applications for U.S. unemployment benefits increased last week, while the number of people on jobless rolls rose further to a 2-1/2-year high towards the end of June, consistent with a gradual cooling in the labour market.
* Markets are now pricing in a 74% chance of the Fed cutting interest rates in its September meeting, according to the CME FedWatch Tool.
* Lower rates reduce the opportunity cost of holding non-yielding gold.
* Meanwhile, Fed officials at their last meeting acknowledged the U.S. economy appeared to be slowing but still counselled a wait-and-see approach before committing to rate cuts, according to minutes of the June 11-12 session.
* Fed Bank of New York President John Williams said on Wednesday that the level of interest rates that's neutral in its impact on the economy likely hasn't risen much.
* Traders now look towards the U.S. nonfarm payrolls report due on Friday.
* Spot silver rose 0.1% to $30.49, platinum added 0.1% at $998.11 and palladium fell 0.4% to $1,025.36.
DATA/EVENTS (GMT)
0600 Germany Industrial Orders MM May
0600 Germany Manufacturing O/P Cur Price SA May
0600 Germany Consumer Goods SA May
0830 UK S&P Global PMI: MSC Comp-Output June
(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Rashmi Aich)
