PRECIOUS-Gold hits two-week high as weak US data boosts rate cut expectations

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Gold hits highest since October 27

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Gold may reach around $4,120-$4,130 soon, analyst says

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Silver rises 3% to hit highest since October 21

(Updates for EMEA morning hours)

By Anmol Choubey

Nov 10 (Reuters) - Gold prices rose 2% on Monday, hitting their highest level in two weeks, as weak U.S. economic data bolstered expectations for a Federal Reserve rate cut next month, while a softer dollar lent further support to bullion.

Spot gold climbed 2% to $4,079.49 per ounce by 0839 GMT, hitting its highest since October 27. U.S. gold futures for December delivery rose 1.9% to $4,087.80 per ounce.

The dollar index fell 0.1%, making gold more affordable for overseas buyers.

"There are concerns regarding the U.S. economy because of the weak data, and the main focus remains on the dollar index," said Jigar Trivedi, senior research analyst at Reliance Securities, adding that safe-haven buying has also increased due to persisting trade war and geopolitical tensions, aiding bullion.

Data last week showed the U.S. economy shed jobs in October, with losses in the government and retail sectors, while businesses cutting costs and adopting artificial intelligence contributed to a surge in announced layoffs.

Additionally, U.S. consumer sentiment fell to its lowest level in nearly 3-1/2 years in early November, weighed by worries over the economic fallout from the longest-ever government shutdown, according to a survey released on Friday.

Meanwhile, the U.S. Senate advanced a measure on Sunday to reopen the federal government and end the 40-day shutdown that sidelined federal workers.

White House economic adviser Kevin Hassett warned in an interview aired on Sunday that U.S. economic growth in the fourth quarter could turn negative if the shutdown persists.

Market participants now see a 65% chance of a Fed rate cut in December.

Gold, which offers no yield, tends to perform well in a low-interest-rate environment and during periods of economic uncertainty.

"Overall, it's a win-win for gold and the undertone is bullish... we may see levels around $4,120-$4,130 soon," Trivedi said.

Elsewhere, spot silver rose 3.3% to $49.91 per ounce, reaching its highest since October 21, platinum rose 2% to $1,576.25 and palladium added 1.7% to $1,403.63. (Reporting by Anmol Choubey in Bengaluru; Editing by Emelia Sithole-Matarise)