Gold prices were flat near a two-week high on Thursday after softer-than-expected US economic data spurred hopes of interest rate cuts as early as September, and the market spotlight is now on Friday's non-farm payrolls data.
Spot gold edged 0.1% higher to $2,358.19 per ounce as of 9:53 a.m. ET (1353 GMT), after prices hit their highest level since June 21 on Wednesday. Most US markets were closed for Independence Day holiday on Thursday.
Bullion prices in the previous session gained more than 1% after a weak services report and ADP employment report on Wednesday depicted a slowing US economy, Reuters reported.
"It appears that there's a strong chance that the rate cuts might occur some time in the end of third quarter or early part of the fourth quarter, which just makes gold a lot more attractive than the alternative (which is) bonds," said Alex Ebkarian, chief operating officer at Allegiance Gold.
Lower rates reduce the opportunity cost of holding non-yielding gold.
Minutes of the Fed's June meeting acknowledged the US economy appeared to be slowing and "price pressures were diminishing".
"Long-term wise, we're seeing the sanctions that the US placed (on Russia) inducing a lot of central banks and other governments to move towards gold specifically to eliminate the counterparty and default risk," Ebkarian added.
The sanctions, announced last month, are aimed at cutting off Russia's access to products and services needed to sustain military production for its war in Ukraine.
Traders are now focused on US nonfarm payrolls data, due on Friday. The market is looking for weaker job creation last month, said Ole Hansen, head of commodity strategy at Saxo Bank.
"Together with an expected easing in wage pressure, the precious metal market is likely to react positively should these numbers be confirmed," Hansen added.
Spot silver fell 0.2% to $30.409 while platinum rose 1.6% to $1,012.50.
Palladium was 0.5% down at $1,024.66, after scaling its highest level since mid-April in the previous session.
