Gold above 3-week low

SINGAPORE — Gold held above a three-week low yesterday as the dollar nursed losses, but prices remained range-bound as traders waited for direction from the US Federal Reserve on the timing of a US interest rate hike. Spot gold had edged up 0,2 percent to $1 124 per ounce by 3.21am GMT, above a three-week low of $1 116,20 per ounce reached earlier in the week. The metal snapped a four-day losing streak on Tuesday, buoyed by a softer dollar. With Friday’s US payrolls data failing to provide clarity on the timing of the Fed’s first interest rate rise in nearly a decade, markets are now eyeing the US central bank’s next policy meeting on September 16-17 for clues.

“Gold looks likely to trade in a relatively tight range prior to the FOMC (Federal open market committee) meeting next week,” MKS Group precious metals trader James Gardiner said. The $1 116 level was a key level of support on the downside, while resistance was at $1 126-$1 127, Mr Gardiner said.

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. A decision to not raise rates at the September meeting could support prices, said HSBC analyst James Steel. The Fed should hold off on raising interest rates until the global economy was more stable, the World Bank’s chief economist said in an interview with the Financial Times published on Tuesday.

“The world economy is looking so troubled that if the US goes in for a very quick move in the middle of this I feel it is going to affect countries quite badly,” Kaushik Basu was quoted as saying. – Reuters.