* Strong payrolls to challenge $2,300 level on downside -analyst
* U.S. non-farm payrolls data due on Friday
* Fed likely to cut rates twice this year, starting Sept -Reuters poll
June 6 (Reuters) - Gold prices hit a two-week high on Thursday as U.S. bond yields fell on signs of a cooling labour market, strengthening a case for a September interest rate cut by the Federal Reserve, while investors positioned for U.S. non-farm payrolls data.
Spot gold was up 0.4% at $2,363.03 per ounce as of 0858 GMT, after hitting a two-week high earlier in the session. It rose 1% on Wednesday.
U.S. gold futures rose 0.3% to $2,381.80.
"Gold is supported by expectations of a slowdown in the U.S. economy and a dovish central bank in the next few months," Kinesis Money market analyst Carlo Alberto De Casa said.
"I don't see another big rally because we already had one in the first part of the year. Yet the fact that gold is able to remain above $2,300 is something incredible."
Benchmark 10-year U.S. Treasury yields were near their lowest in two months, after data this week hinted that the labour market is finally cooling.
Markets are now awaiting the non-farm payrolls data on Friday for further clues.
The Fed will likely cut its key interest rate in September and once more this year, according to a majority of forecasters in a Reuters poll.
Lower rates reduce the opportunity cost of holding non-yielding bullion.
"The only thing that could pressure gold at the moment is a revamp of inflation in the U.S.," said De Casa.
Meanwhile, in wider financial markets, global stocks were on the brink of an all-time high and the euro rose ahead of what was widely expected to be the European Central Bank's first interest rate cut in nearly five years.
Following gold's momentum, spot silver rose 1% to $30.32 per ounce, platinum was up 0.3% at $994.89 and palladium gained 0.3% to $933.95.
(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich)
