PRECIOUS-Gold rises on weaker dollar, rate cut expectations ahead of US jobs data

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Dollar hovers near two-month low

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U.S. employment data due on Tuesday

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Palladium climbs to 2-month peak, platinum at 14-year high

(Rewrites copy for AMERS early-morning session)

By Sarah Qureshi

Dec 15 (Reuters) - Spot gold rose to hover near a seven-week peak on Monday, bolstered by a softer dollar and expectations of U.S. interest rate cuts ahead of key jobs data, while silver held below a record high hit on Friday.

Spot gold was up 0.4% to $4,321.25 an ounce by 10:21 a.m. ET (1521 GMT), after rising more than 1% earlier in the session. U.S. gold futures rose 0.6% to $4,352.90 an ounce.

The dollar languished near a two-month low hit on Friday, making greenback-priced bullion more attractive for overseas buyers.

U.S. non-farm payrolls report and retail data will be released tomorrow and scrutinized by traders for further cues on the Federal Reserve's policy path.

"Traders right now are getting ahead of the Fed, expecting the data to come out a little better (than expected) and the Fed to be more inclined to continue cutting rates," said RJO Futures senior market strategist Bob Haberkorn.

Gold, a non-yielding asset, tends to thrive in a low interest rate environment.

Last week, the Fed delivered its third and final quarter-percentage-point rate cut of the year, while signaling a pause on further easing until more data emerges. Markets are pricing in two cuts next year, with a 73% chance of a move in January 2026, according to the CME FedWatch Tool.

Spot silver rose 2.6% to $63.64, after reaching a record-high of $64.65 on Friday, staying within striking distance of the unprecedented $65/oz milestone. The metal has gained 120% this year.

"Silver is leading the pack when it comes to precious metals. By year-end, we'll be trading north of $65 and I could see $70 in the early part of quarter one next year," Haberkorn added.

Meanwhile, spot platinum gained 2.8% to $1,793.69, hitting its highest level since September 2011, while palladium rose to a two-month high, adding 5.2% to $1,564.25 per ounce.

Nornickel, the world's largest palladium producer, said in a metals market review that including investment demand, the palladium market could see a deficit of 0.2 million ounces this year.

(Reporting by Sarah Qureshi in Bengaluru; Editing by Leroy Leo)