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REFILE-PRECIOUS-Gold tops $1,100 on September rate hike uncertainty

Published 11/08/2015, 05:56 am
© Reuters. REFILE-PRECIOUS-Gold tops $1,100 on September rate hike uncertainty
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* Gold records longest weekly losing streak since 1999

* Spot platinum rallies 3.1 pct

* Holdings of No. 1 gold ETF hit lowest since Sept 2008

By Marcy Nicholson and Jan Harvey

NEW YORK/LONDON, Aug 10 (Reuters) - Gold rose 1 percent to above $1,100 an ounce on Monday, its biggest increase in more than seven weeks, as the U.S. dollar turned lower and comments from Federal Reserve officials raised uncertainty about a September rate hike.

Atlanta Federal Reserve President Dennis Lockhart said a Fed decision to raise interest rates should come soon, but his prepared speech did not repeat recent comments in which he said he was ready to vote for a rate hike next month. ID:nL1N10L1K3

Gold prices have fallen in the second half of this year on the prospect of rising rates, which would lift the opportunity cost of holding bullion while boosting the dollar.

Gold has, however, found support after sliding to a 5-1/2 year low at $1,077 an ounce last month and is now up for a third straight session.

Spot gold XAU= was up 1 percent at $1,103 an ounce at 3:27 p.m. EDT (1927 GMT), while U.S. gold futures GCZ5 for December delivery settled up 0.9 percent at $1,104.10 an ounce.

Among precious metals, spot platinum XPT= gained the most, rising 3.1 percent to $989.50 an ounce, a session high.

The U.S. dollar .DXY turned lower after Fed Vice Chairman Stanley Fischer said the global deflationary trend "bothers" the Fed but is one of many factors it is watching, stoking uncertainty about a September rate hike. FRX/

The 19-market Thomson Reuters CoreCommodity Index .TRJCRB surged 2.1 percent as copper, oil and grains rallied.

Gold prices extended gains on short-covering and buy-stops that were triggered around $1,100, traders said.

"The gold market triggered a lot of stops on the upside. That was a pretty good driving factor," said Phillip Streible, senior commodities broker for RJO Futures in Chicago.

While the market is still awaiting further clues on the prospect of a near-term rate rise, gold is lacking an immediate driver, ABN Amro analyst Georgette Boele said.

"Gold prices just need a new acceleration point. We still expect the interest rates in the U.S., and the dollar, to (provide that)," Boele said.

Gold fell for a seventh week in a row last week, its longest such retreat since 1999, having struggled to pull away from a 5-1/2-year trough reached in July.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares GLD , slipped to their lowest since September 2008 on Friday. GOL/ETF

Spot palladium XPD= rose 1.3 percent to $605.50 an ounce while silver XAG= was up 2.5 percent at $15.21 an ounce.

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