Gold hovers near 8-week high on hopes of Fed rate-hike pause

Gold prices inched up on Thursday, hovering near an eight-week peak on bets that the U.S. Federal Reserve might soon hit pause on its interest rate-hiking cycle.

* Spot gold rose 0.1% to $1,978.59 per ounce by 0053 GMT. U.S. gold futures were little changed at $1,981.30.

* The dollar index wobbled near a more than one-year low, making gold cheaper for holders of other currencies.

* The Fed is expected to raise rates by 25 basis points (bps) in their meeting next week, keeping them in the 5.25%-5.5% range until cuts are seen 2024 onwards, per CME’s Fedwatch tool.

* Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

* The European Central Bank is also expected to raise rates by 25 bps next week.
* Investors will keep an eye out for initial jobless claims data in the U.S. later in the day for the week of July 15, forecast to rise to 242,000 from a seasonally adjusted 237,000. * SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose nearly 0.2% to 913.80 tonnes on Wednesday from 912.07 tonnes on Tuesday, rising for the first time in nearly three weeks.

* Meanwhile, China is set to keep its lending benchmarks unchanged, a Reuters survey showed, even as a rapidly faltering economy raises expectations for more stimulus.

* Spot silver was steady around $25.16 per ounce, platinum was down 0.1% to $972.48 while palladium slipped 0.3% to $1,303.39.