Weekly jobless claims data due at 1230 GMT
China39;s central bank held back buying for third straight month
U.S. 10year Treasury yields slip

Aug 8 Reuters Gold prices gained on Thursday, snapping five sessions of losses, as Middle East tensions and optimism surrounding U.S. rate outlook supported safehaven bullion, while traders awaited more clues on the Federal Reserve39;s policy trajectory.

Spot gold was up 0.8 at 2,399.50 per ounce, as of 0704 GMT. U.S. gold futures were up 0.2 at 2,437.80.

Longerterm fundamentals look supportive for gold, which include geopolitical tensions in the Middle East and the downward trajectory of the U.S. treasury yields, said Kelvin Wong, OANDA39;s senior market analyst for Asia Pacific.

Yields tumbled to more than oneyear lows this week after Friday39;s surprisingly weak U.S. employment report for July.

Brokerages including J.P. Morgan, Citigroup and Wells Fargo have forecast a 50basispoint interest rate cut by the Fed in September after last week39;s U.S. jobs data.

Market focus will be on weekly initial U.S. jobless claims data due at 1230 GMT, while Richmond Fed President Tom Barkin is also expected to speak later in the day.

Lower interest rates reduce the opportunity cost of holding nonyielding bullion. Gold is also used a safe investment during uncertain times.

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