June 12 (Reuters) - Gold prices scaled a one-week peak on Thursday, steered by simmering Middle East tensions and cooler U.S. economic data that fuelled fresh bets on Federal Reserve rate cuts.
Spot gold gained 1% to $3,387.94 an ounce by 1130 ET (1530 GMT), its highest level since June 5.
U.S. gold futures climbed nearly 2% to $3,409.10.
"Gold is up for the second straight day largely on heightened geopolitical risks. If gold clears $3,400 again, minor hurdles at $3,417 and $3,431 remain — but a breakout to new all-time highs looks likely ultimately," said Peter Grant, vice president and senior metals strategist at Zanier Metals.
U.S. President Donald Trump said the U.S. was moving personnel out of the Middle East because it "could be a dangerous place". Iranian Defence Minister Aziz Nasirzadeh also said on Wednesday that if Iran was subjected to strikes it would retaliate by hitting U.S. bases in the region.
Elsewhere, data showed U.S. producer prices increased less than expected in May. Meanwhile, the number of Americans filing new applications for unemployment benefits was unchanged at higher levels last week as labour market conditions continued to steadily ease.
Traders see an 80% chance of a September Fed rate cut, with a second rate cut as soon as October, versus December as seen before data.
The latest data followed Wednesday's cooler-than-anticipated Consumer Price Index (CPI) report for May.
On the tariff front, Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher U.S. tariffs take effect, but did not believe that would be necessary.
Spot silver was up 0.1% at $36.26 per ounce after hitting its highest since 2012 on Monday.
Grant said that, supported by a multi-year supply deficit and renewed technical strength, silver looks poised to hit $40 if it clears the $38 level.
Platinum rose 1.3% to $1,272.56, hovering at a more-than four-year high, while palladium fell 2.2% to $1,056.54.
Reporting by Ashitha Shivaprasad and Sarah Qureshi in Bengaluru
