Gold near two-month high as hopes for mid-year US rate cut rise

Gold prices hovered near a two-month high on Monday, after softer U.S. economic data last week raised hopes for a June interest rate cut by the Federal Reserve, sending the dollar and treasury yields lower.

FUNDAMENTALS

* Spot gold edged 0.2% lower to $2,080.09 per ounce, as of 0152 GMT, after hitting $2088.19 on Friday - its highest since Dec. 28. U.S. gold futures fell 0.3% lower to $2,088.60.


* Benchmark U.S. 10-year Treasury yields and the dollar index retreated on Friday after data showed U.S. manufacturing slumped further in February and construction spending surprisingly fell in January.

* A weaker dollar makes gold less expensive for other currency holders while lower bond yields decrease the opportunity cost of holding non-yielding bullion.

* The University of Michigan's consumer sentiment survey came out weak.

* Markets also took stock of new troubles at regional U.S. lender New York Community Bancorp, increasing appeal for safe-haven assets such as bullion.

* Another set of data on Thursday indicated that the annual increase in U.S. inflation in January was the smallest in nearly three years, keeping a June rate cut from the Fed on the table.

* Lower interest rates boost the appeal of non-yielding bullion.

* The next major U.S. economic release will be February's employment report due on Friday.

* COMEX gold speculators raised their net long positions by 3,694 contracts to 68,042 in the week ended Feb. 27, data showed on Friday.

* Northam Platinum's CEO on Friday said platinum mining companies in South Africa are caught up in the worst crisis in three decades as prices plummet, after Impala Platinum said it might decide within six months to close loss-making shafts, if prices do not improve.

* Spot platinum fell 0.3% to $884.15 per ounce, and palladium was steady at $957.88, while silver fell 0.6% to $23.02. DATA/EVENTS (GMT) 1600 US Fed's Harker speaks -- 2330 Japan CPI Tokyo Feb