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CORRECTED-PRECIOUS-Gold steady as markets await Fed rate hike clues

Published 24/10/2016, 12:43 pm
© Reuters.  CORRECTED-PRECIOUS-Gold steady as markets await Fed rate hike clues
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(Corrects first bullet to show spot gold ended almost flat in last session, it did not fall 0.2 pct)

Oct 24 (Reuters) - Gold prices were broadly stable early Monday, after locking in their first weekly gain in four last week, with markets waiting for further clues on the timing of any interest rate hike.

FUNDAMENTALS

* Spot gold XAU= was up 0.05 percent at $1,266.86 an ounce at 0050 GMT, after closing almost flat at $1,266.25 in the previous session.

* U.S. gold futures GCcv1 fell 0.02 percent to $1,267.50.

* Third-quarter growth figures from the United States and Britain will be scrutinised by financial markets in the week, and a business survey will provide the first evidence on how the euro zone has fared going into the fourth quarter. Disappointing growth in the world's largest economy might make it less likely the U.S. Federal Reserve will raise interest rates in December. Markets now put the chances the Fed will act at about 70 percent.

* Gold is highly sensitive to increases in U.S. interest rates, which can lift the opportunity cost of holding non-interest-bearing gold.

* Several Fed policymakers are due to speak early in the week, before the blackout period preceding the Nov. 2 meeting. But they would have to be unusually hawkish to swing expectations towards a rate increase hike next month, which comes just before the Presidential election.

* San Francisco Federal Reserve Bank President John Williams on Friday redoubled his call for raising rates soon, telling reporters that "this year would be good" for a rate rise that he had wanted to take effect last month. European Central Bank policymakers are likely to decide at their meeting in December how to proceed with their quantitative easing policy, ECB Governing Council member Ewald Nowotny said on Friday. Long-term euro zone inflation projections remain well anchored near the European Central Bank's target, but GDP growth will be weaker than earlier thought, the ECB's Survey of Professional Forecasters showed on Friday. The dollar index .DXY , which measures the greenback against a basket of currencies, was stable at 98.74 after touching eight-month highs Friday. USD/

* Hedge funds and money managers cut their net long positions in COMEX gold for the third straight week in the week to Oct. 18, sending it to a fresh seven-month low. SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings fell 1.71 percent to 953.56 tonnes on Friday. GOL/ETF

* For the top stories on metals and other news, click TOP/MTL or GOL

DATA/EVENT AHEAD (GMT)

0700 France

Markit manufacturing PMI flash

Oct

0730 Germany

Markit manufacturing PMI flash

Oct

0800 Euro zone Markit manufacturing PMI flash

Oct

1345 U.S.

Markit manufacturing PMI flash

Oct

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