PRECIOUS-Gold hovers close to 15-week high as rate cut hopes fuel demand

* Dollar drops to nearly 8-week lows
* U.S. private sector adds fewest jobs in May since 2010
* Silver off one-month high
* Platinum dips from near 3-week high

(Adds fresh comments, updates prices)
By Arijit Bose and Swati Verma
June 5 (Reuters) - Gold prices pared earlier gains on
Wednesday, having jumped to their highest in 15 weeks as nagging
fears about global trade and expectations of a U.S. interest
rate cut encouraged investors to flock toward bullion.
Spot gold XAU= was up 0.4% at $1,329.57 per ounce at 1:55
p.m. EDT (1755 GMT). The metal had earlier soared as much as
1.4% to $1,343.86, within striking distance of a 10-month peak
at $1,346.73 scaled on Feb. 20.
U.S. gold futures GCcv1 settled up 0.4% at $1,333.60 an
ounce.
"Powell's speech yesterday about how he is going to watch
the economy for the potential of lowering the interest rate,
that seemed to provide a very good bid to gold," said Michael
Matousek, head trader at U.S. Global Investors.
"The market was pricing in two rate cuts before, now the
probability of the rate cuts are increasing."
On Tuesday, Fed Chair Jerome Powell moved away from his
"patient" approach and instead acknowledged risks due to trade
conflicts, saying the central bank would respond "as
appropriate." Gold gains on expectations of a rate cut since lower
interest rates reduce the opportunity cost of holding the metal
and weighs on the dollar.
The dollar index .DXY fell to a near eight-week low after
data showed U.S. private employers added the fewest jobs in May
since 2010, aggravating concerns the U.S. economy could fall
prey to an elongated trade war. Heightening concerns, the International Monetary Fund (IMF)
also warned that the U.S.-China tariffs could slash global
economic output by 0.5% in 2020. "The IMF also came worried about global economy and the ADP
numbers were poor. Adding to that, the Fed authorities are
confirming that interest rate cuts are coming," said George
Gero, managing director at RBC Wealth Management. "So we are seeing more people jumping into gold because it
was a sleeping giant between $1,275 -$1,300 for months and
people gave up on gold. The economic news, political news and
tariff uncertainties helped gold move out of the narrow range."
Gold prices have gained about $70 an ounce since U.S.
President Donald Trump's tariff threat on Mexico, with investors
selling riskier assets.
The jump in gold prices also saw a 2.2% rise in the holdings
of SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, on Monday. It was SPDR's biggest one-day
percentage gain since July 2016. GOL/ETF
Silver XAG= edged 0.1% lower to $14.80 per ounce, having
touched an over one-month high of $15.04 earlier in the session.
Platinum XPT= fell 1.5% to $803.27 per ounce, having
earlier hit $832.63 its highest since May 17. Palladium XPD=
fell 1.4% to $1,328.15 per ounce.