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Gold gains traction on weak United States financial data

Gold prices edged up on Wednesday after data recommending drab U.S. economic activity kept alive wish for at least one rate of interest cut this year.

Spot gold was up 0.1% at $2,330.27 per ounce as of 1156 GMT. Costs increased about 0.4% in the previous session.

U.S. retail sales barely increased in May and figures for the prior month were revised significantly lower, data showed on Tuesday, recommending economic activity remained lacklustre in the 2nd quarter.

That slightly enhanced the odds of a Federal Reserve rate cut in September to 67% from 61% a day earlier, the CME FedWatch tool showed.

The main drive for gold's cost action remains the market expectations over the Fed's monetary policy and despite prices creeping up, the relocation is quite subdued as the market awaits more substantial news, said Ricardo Evangelista, senior expert at ActivTrades.

Lower rate of interest decrease the opportunity expense of holding non-yielding bullion.

Market expectations indicate a minimum of one rate cut from the Fed. That situation has been completely priced in the value of the dollar. Federal government purchases (of gold) stay steady as well. So, unless there is any substantial modification in this situation, costs are anticipated to stay supported above the $2,300 level, Evangelista said.

Gold prices rose about 1.3% last Friday on signs of inflation cooling in the United States amidst a selloff across European equities as French stocks were damaged by political turmoil.

Political unpredictability surrounding Europe can be a positive, with elections in France and the UK nearing, Kinesis Money market analyst Carlo Alberto De Casa said.

The more instant focus, however, is on the U.S. weekly unemployed claims information on Thursday and flash acquiring supervisors' indexes on Friday.

Area silver was up 0.1% at $29.54 per ounce, platinum rose 1.1% to $983.45 and palladium got 1.9% to $904.00.

(source: Reuters)