Gold Near 3-Mth High As Investors Expect US Rate Hike Delay

Gold steadied near a three-month high on Tuesday, as investors pushed back expectations of a Federal Reserve interest rate hike to next year and on a weaker dollar. 

FUNDAMENTALS

 * Spot gold was little changed at USD 1,161.96 an ounce by 0037 GMT, after a two-day rally. It hit a three-month high of USD 1,169 in the previous session. 

* The dollar languished around three-week lows against a basket of currencies.

 * The Fed was expected to raise US rates for the first time in nearly a decade this year, but recent weak US data, concerns over Chinese growth and volatility in financial markets have prompted markets to shift rate hike views to early 2016. 

* The US central bank refrained from hiking rates at its last meeting in September. It holds two more policy meets in 2015: on Oct. 27-28, and then in December. 

* Higher rates could dent demand for non-interest-paying bullion, while boosting the dollar. 

* The Fed should hold off on any rate hike until it is clear that a global slowdown, trouble in China and other international risks will not push the US recovery off course, Fed Governor Lael Brainard said on Monday in one of the strongest defences yet of a go-slow approach to rate policy.

 * There could be sufficient economic data for the Fed to consider a rate hike at their meeting later in October but there will be a lot more data on hand in time for the December meeting, Atlanta Fed President Dennis Lockhart said on Monday.


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