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PRECIOUS-Gold near 1-week high as investors see Fed delaying rate hike

Published 06/10/2015, 05:35 pm
© Reuters.  PRECIOUS-Gold near 1-week high as investors see Fed delaying rate hike
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* Gold seeing resistance at $1,140

* Silver holds near three-month high (Updates prices)

By A. Ananthalakshmi

SINGAPORE, Oct 6 (Reuters) - Gold held just below a one-week high on Tuesday as investors bet sluggish U.S. nonfarm payrolls data would deter the Federal Reserve from hiking rates this year, although some cautioned that profit taking could hurt the metal in the near term.

Spot gold XAU= ticked up 0.1 percent to $1,137.15 an ounce by 0629 GMT. Prices rose to $1,141.80 in the previous session, the highest since Sept. 28, before closing down 0.2 percent.

The metal is still largely holding on to Friday's 2.2 percent jump, the biggest one-day rise since Jan. 15 following data that showed U.S. employers slammed the brakes on hiring over the last two months. ID:nLNN2LEBGC

"This week we think that some form of profit taking may occur after Friday's heady gains post-U.S. nonfarm payrolls," say Howie Lee, an analyst at Phillip Futures.

Lee said there was a reasonably strong resistance at $1,140, above which gold has struggled to hold in the last two sessions.

Markets believe the sluggishness in the U.S. economy, along with weakness in China and volatility in financial markets, could prompt the Fed to hold rates.

Non-interest-paying gold had benefited from ultra-low U.S. rates. But expectations that the Fed will move to hike rates for the first time in nearly a decade has seen the metal lose about 4 percent of its value this year.

However, recent U.S. data has not been robust. After last week's soft jobs report, data on Monday showed the pace of growth in the U.S. services sector decelerated in September as new orders and business activity slowed. ID:nN9N118014

Meanwhile, SPDR Gold Trust GLD , the top gold-backed exchange-traded fund, saw a small outflow of 0.22 tonnes on Monday. That is the fund's first outflow in two weeks. GOL/ETF

Asian stocks rose on Tuesday on prospects of a delay in the rate hike. The dollar had a mixed performance against major currencies as the headwind from fading expectations on the Fed's rate hike was countered by positive risk sentiment. MKTS/GLOB

Among other precious metals, silver XAG= dipped slightly to $15.58, but stayed near a three-month high of $15.71 hit on Monday. It has gained nearly 8 percent in the last two sessions.

Palladium XPD= slipped, after hitting its highest since June in the previous session on expectations that demand for gasoline cars, where the metal is used in catalysts, would rise as a result of the Volkswagen (XETRA:VOWG) diesel engine emissions scandal.

PRICES AT 0629 GMT

Metal

Last

Change Pct chg

Spot gold

1137.15

1.55

0.14 Spot silver

15.6 -0.01

-0.06 Spot platinum

915.75

3.5

0.38 Spot palladium

686.75 -2.75

-0.4 Comex gold

1137.4

-0.2

-0.02 Comex silver

15.645 -0.063

-0.4

COMEX gold and silver contracts show the most active months

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