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PRECIOUS-Gold rallies for fourth day on hopes of delay in Fed rate hike

Published 14/10/2015, 06:00 pm
PRECIOUS-Gold rallies for fourth day on hopes of delay in Fed rate hike
XAU/USD
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* Gold climbs to new three-month high

* Other precious metals track gold higher

* Dollar index near 3-1/2 week low (Updates prices)

By A. Ananthalakshmi

SINGAPORE, Oct 14 (Reuters) - Gold extended gains to a fourth straight session on Wednesday, hitting a fresh three-month high, bolstered by a weaker dollar and comments from Federal Reserve officials cautioning against a rate hike this year.

Spot gold rose 0.3 percent to $1,172.40 an ounce by 0643 GMT, after earlier climbing to $1,174.40 - its highest since July 6. Other precious metals were all tracking gold higher.

Bullion has gotten a boost since the weak U.S. nonfarm payrolls report earlier this month that prompted the market to shift expectations of a U.S. rate hike to 2016 and sell the dollar.

Weak Chinese data on Wednesday added to global growth concerns, another factor investors believe could deter the Fed from hiking rates this year.

Charts were also looking good for bullion, analysts said.

"The precious complex continues to look bid-ish and participants should be prepared for both gold and silver to break through their upcoming technical resistance points," said James Gardiner, a trader at MKS Group.

The immediate resistance for gold was at $1,170-71, he said.

Analysts at ScotiaMocatta said a close for gold above $1,170 should see the metal go all the way to $1,192.

Helping gold's move higher was a sluggish dollar, which was trading near its lowest in 3-1/2 weeks against a basket of major currencies as further signs of weakness in China fanned expectations that the Fed will have to wait longer before any policy tightening.

Consumer inflation in China cooled more than expected in September while producer prices extended their slide to a 43rd straight month, adding to concerns about deflationary pressures in the world's second-largest economy.

The Fed refrained from hiking rates at its September meeting, citing concerns about the global economy, although Fed Chair Janet Yellen said later the central bank was on track to raise rates this year.

However, Fed Governor Daniel Tarullo said on Tuesday the Fed should not hike interest rates this year, in comments that point to sharp divisions within the U.S. central bank over America's readiness for higher rates.

Tarullo, who rarely comments in public on monetary policy, is the second Fed governor this week to urge caution on the timing of rate hikes.

Fed Governor Lael Brainard on Monday said the Fed should hold off on rate hikes until it is clear that trouble in China and other international risks will not push the U.S. recovery off course.

PRICES AT 0643 GMT

Metal

Last

Change Pct chg

Spot gold

1172.4

4

0.34 Spot silver

15.99

0.1

0.63 Spot platinum

989.24

2.24

0.23 Spot palladium

691

11.5

1.69 Comex gold

1172.2

6.8

0.58 Comex silver

15.975 0.068

0.43

COMEX gold and silver contracts show the most active months

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