PRECIOUS-Safe-haven gold touches 2-week peak on trade tensions, rate cut hopes

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Market sees over 91% rate cut chance in Sept - CME Fedwatch

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Silver hits 2-week high

(Rewrites for US early-morning session)

By Sarah Qureshi

Aug 7 (Reuters) - Gold rose to an over two-week high on Thursday, buoyed by safe haven demand after U.S. President Donald Trump's tariffs went into effect and U.S. jobs data added to rate-cut expectations.

Spot gold gained 0.6% to $3,388.09 per ounce as of 0956 a.m. ET (13:56 GMT), after hitting its highest level since July 23 earlier in the session. U.S. gold futures added nearly 0.7% to $3,455.60.

"Ongoing trade tensions, and heightened geopolitical tensions continue to underpin the market with the safe haven interest," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Trump's higher tariffs on imports from a slew of countries came into effect on Thursday, leaving some trade partners like Switzerland, Brazil and India scrambling to reach a better deal.

Meanwhile, the number of Americans filing new applications for unemployment benefits ticked up to a one-month high last week, hinting at some easing in the U.S. labor market.

The data is supportive of rising expectations for Fed rate cuts, said Grant, adding "if the (U.S.) data continue to show weakness, we could see more dovish expectations develop and that is generally supportive to gold as well."

Gold, used as a store of value during economic and geopolitical uncertainty, also tends to thrive in a low-interest rate environment.

Last week, weaker U.S. payrolls data boosted rate cut bets, with the market now pricing in an over 91% chance of a 25-basis-point rate cut next month, as per CME Group's FedWatch Tool.

Three Fed officials sounded the alarm on a weakening U.S. labour market, with Minneapolis Fed President Neel Kashkari on Wednesday saying two quarter-percentage-point rate cuts by year-end is reasonable.

Spot silver rose 1.5% to $38.40 per ounce, its highest since July 25, platinum was up 0.2% at $1,335.60 and palladium gained 2.5% to $1,159.93. (Reporting by Sarah Qureshi in Bengaluru; Editing by Shailesh Kuber)