* SPDR Gold holdings rise 0.5% on Wednesday
* Palladium hits more than six-week high, up for 6th session
* Fed to meet on June 18-19; markets price at least 2 rate cuts in 2019 (Adds quotes, details, updates prices)
By Eileen Soreng
June 13 (Reuters) - Gold prices edged up to the week's high on Thursday, supported by expectations for an interest rate cut by the U.S. Federal Reserve following soft inflation data, although an uptick in equities capped gains.
Spot gold rose 0.2% to $1,335.78 per ounce as of 10:37 a.m. EDT (1437 GMT), after touching its highest since June 7 at $1,338.87 earlier in the session.
U.S. gold futures were also up 0.2% at $1,339.30 an ounce.
"The initial move on higher prices was due to escalating trade tensions... Thereafter, concerns around recession or a slowing U.S. economy has helped push up rising expectations of a Fed interest rate cut in July," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar, making gold cheaper for investors holding other currencies.
Fed policymakers are scheduled to meet on June 18-19, with financial markets pricing in at least two rate cuts by the end of 2019, after tepid consumer price data on Wednesday and employment data indicated the economy was possibly losing steam.
"It (gold) found strong support around $1,320 earlier this week and has since burst higher with the previous peak around $1,350 in its view. A break of this could propel gold higher, although it will have to be matched with momentum..." Craig Erlam, senior market analyst with OANDA, said in a note.
"Risk appetite in the markets is likely to work against gold but the dollar looking vulnerable is clearly supportive."
U.S. stocks opened higher on Thursday, helped by gains in energy shares after suspected attacks on two tankers off the coast of Iran boosted oil prices.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.5% to 759.70 tonnes on Wednesday from 756.18 tonnes on Tuesday.
Silver climbed 0.4% to $14.80 per ounce and platinum dipped 0.3% to $806.10.
Palladium gained nearly 2% to $1,433.95 an ounce after hitting a more than six-week high of $1,440.04 earlier in the session. (Reporting by Eileen Soreng and Diti Pujara in Bengaluru; Editing by Dan Grebler)