* Silver dips to two-week low, platinum slips
* Investors await U.S. labor market report
By Hassan Arshad
Aug 1 (Reuters) – Gold slipped to a two-week low on Thursday, a day after the U.S. Federal Reserve cut interest rates for the first time in a decade but dampened expectations of future rate reductions, which sent the dollar to a 26-monthpeak.
Spot gold XAU= fell 0.5% to $1,407.13 per ounce as of 1017GMT, after falling to its lowest since July 17 at $1,402.15.U.S. gold futures GCcv1 slid 1.3% to $1,407.60 an ounce.
U.S. Fed Chairman FXTM Jerome Powell sent “mixed messages”with his forward guidance when he cut U.S. rates by 25 basis points, the first cut since the global financial crisis in 2008,FXTM analyst Lukman Otunuga said.
“The key takeaway that is causing gold to trade lower is that Powell said it’s not the beginning of a long series of ratecuts. Markets are now questioning whether it’s a one-and-done(step),” he said.
After the Fed comments, the dollar index .DXY rose to its highest since May 2017, making the non-yielding bullion expensive for holders of other currencies.
“The dollar has broken out on the charts and looks like itis going to push higher still, yet another reason to pursue caution when it comes to the long side in the precious group,”INTL FCStone analyst Edward Meir said in a note.
On the technical side gold was still holding above the psychologically important $1,400 level.
“Even if gold were to come under further pressure as result of a good U.S. labor market report … , we would regard this as ‘merely a correction within an intact upswing,”Commercialize analysts said in a note.
Gold posted its third straight month of gains in July,having reached its highest in six-years at $1,452.60 on July 19.
“Future rate cuts will be contingent on economic data from the United States and U.S.-China trade developments,” Otunugasaid.
“In the long term, gold is still supported even though the Fed may disappoint markets, other major central banks across the globe are expected to cut rates.”
Gold, which offers no yield of its own, tends to gain when interest rates fall.
Elsewhere, silver XAG= was down 1.6% at $16 per ounce,after touching a two-week low of $15.92 earlier in the session.