Gold drifts lower, investors eye Powell's speech
U.S. non-farm payrolls due on Friday
ADP employment data on Wednesday
U.S. manufacturing contracted in June
Updates prices
By Ashitha Shivaprasad
July 2 (Reuters) -Gold prices slipped on Tuesday as the U.S. dollar held firm, while investors awaited comments from Federal Reserve Chair Jerome Powell and key jobs data for further clues about the interest rate outlook.
Spot gold XAU= was down 0.2% at $2,327.06 per ounce, as of 0710 GMT. U.S. gold futures GCcv1 steadied at $2,339.10.
The dollar was supported by rising U.S. bond yields, making bullion less attractive.
Benchmark 10-year Treasury yields US10YT=RR rose to their highest levels since late May on Monday, with analysts attributing the move to expectations of Donald Trump winning the U.S. presidency and raising tariffs and government borrowing. USD/ US/
In order for gold prices to break above the current range, the market needs to see further weak data points that increase the possibility of a Fed rate cut in September, said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA. FEDWATCH
Lower rates reduce the opportunity cost of holding zero-yielding gold.
Traders will look for cues on rate cuts when Powell speaks later in the day. Other data points on their radar include ADP employment, ISM services PMI and minutes from the Fed's latest policy meeting, due on Wednesday, as well as the nonfarm payrolls report, scheduled for release on Friday.
U.S. manufacturing contracted in June, while a drop in a measure of prices paid by factories for inputs suggested that inflation could continue to subside.
Separately, analysts at Citi said they expect gold investment demand to rise to absorb almost all mine supply over the next 12-18 months, but added that the main downside risk to their bullish base case forecast is China retail demand being lower than anticipated, owing to quotas on imports.
"Weaker central bank demand or a delay to the Fed normalizing interest rates are also risks to the strong investment demand thesis," they said in a note.
Spot silver XAG= fell 0.5% to $29.34, platinum XPT= lost 0.4% at $981.30 and palladium XPD= firmed 0.8% to $979.23.
Spot gold price in USD per oz https://reut.rs/3VLyQyJ
Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich, Sonia Cheema and Mrigank Dhaniwala
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