PRECIOUS-Gold edges higher as U.S. data fans slowdown fears

(Adds comment, updates prices)
By Diptendu Lahiri
Oct 2 (Reuters) - Gold prices edged up on Wednesday, after
rising as much as 1% in the previous session, as disappointing
U.S. manufacturing data fanned fears of a sharp global economic
slowdown and stoked bets of further interest rate cuts.
Spot gold XAU= was up 0.2% to $1,481.76 per ounce at 0736
GMT. Prices hit a near two-month low of $1,458.50 on Tuesday,
before climbing as much as 1% during the session.
U.S. gold futures GCv1 were little changed at $1,488.20
per ounce.
"Considering the risks to the global economy, gold is still
a strong safe-haven asset," said Phillip Futures analyst
Benjamin Lu.
U.S. manufacturing activity tumbled to a more than 10-year
low in September as lingering trade tensions weighed on exports,
fanning fears of an economic slowdown and raising expectations
that the U.S. Federal Reserve could further ease monetary
policy. But Lu added: "Until and unless Fed gives really strong
dovish signals, we will see gold trading around $1,500."
Lower interest rates reduce the opportunity cost of holding
non-yielding gold.
The data also prompted President Donald Trump to lash out at
the Fed, saying the central bank has kept interest rates "too
high", with a strong dollar hurting U.S. factories. USD/
Markets now await U.S. non-farm payrolls data due on Friday
to gauge the state of the world's largest economy amid its
bitter trade war with China.
"I think the market does not want to rush ahead of the
non-farm payroll data in case there is a surprise hit," said
AxiTrader market strategist Stephen Innes.
"Investors are bit scared. This emotion will probably
inhibit people from jumping back into the (gold) bandwagon over
the near term. They are going to need some convincing."
On the technical front, spot gold may consolidate in a
narrow range of $1,462-$1,488 per ounce, or bounce towards
$1,514, as its short downtrend from the Sept. 4 high of $1,557
could have temporarily ended, according to Reuters analyst Wang
Tao. Among other precious metals, silver XAG= was up 0.3% to
$17.28 per ounce, platinum XPT= was steady at $876.65 per
ounce while, palladium XPD= edged down 0.4% to $1,645.49 per
ounce.