Gold firms above 3-week low on weaker dollar

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Published: September 9, 2015 8:35:05 AM

Gold has failed to attract strong investor interest as a safe haven despite the recent weakness in stocks due to worries over the Chinese economy...

gold price, gold rateGold held above a three-week low on Wednesday as the dollar nursed losses, but prices remained range-bound as traders waited for direction from the Federal Reserve on the timing of a US interest rate hike. (Reuters)

Gold held above a three-week low on Wednesday as the dollar nursed losses, but prices remained range-bound as traders waited for direction from the Federal Reserve on the timing of a US interest rate hike.

FUNDAMENTALS

Spot gold had edged up 0.2 percent to $1,123.11 an ounce by 0024 GMT, above a three-week low of $1,116.20 reached earlier in the week. The metal snapped a four-day losing streak on Tuesday, getting some reprieve from a softer dollar.

Friday’s US payrolls data failed to provide clarity on the timing of the Fed’s first interest rate rise in nearly a decade.

Markets are now eyeing the Fed’s next policy meeting on September 16-17 for clues.

The prospect of higher rates, which would lift the opportunity cost of holding non-yielding bullion while boosting the dollar, has weighed on gold prices this year.

The Fed should hold off on raising interest rates until the global economy is more stable, the World Bank’s chief economist said in an interview with the Financial Times published on Tuesday.

Gold has failed to attract strong investor interest as a safe haven despite the recent weakness in stocks due to worries over the Chinese economy, showing that the metal is struggling to find direction outside US monetary policy, analysts say.

South Africa’s mining industry, unions and the government want to boost platinum’s sagging fortunes by promoting it as a central bank reserve asset, but upgrading the metal to gold’s coveted financial status will be an uphill struggle.

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