SINGAPORE, Oct 14 (Reuters) - Gold held just below a
three-month high on Wednesday, bolstered by a weaker dollar and
comments from Federal Reserve officials cautioning against a
rate hike this year.
FUNDAMENTALS
* Spot gold XAU= had eased slightly to $1,166.40 an ounce
by 0037 GMT, following a three-day rally. The metal had climbed
to $1,169 on Monday, its highest since July 7.
* The Fed had refrained from hiking rates at its September
meeting citing concerns about the global economy, though Fed
Chair Janet Yellen had said later that the central bank was on
track to raise rates this year.
* However, a weak U.S. nonfarm payrolls report earlier this
month prompted the market to shift expectations of a Fed rate
hike to 2016 and sell the dollar.
* Gold, as a non-interest-paying asset, has been well bid
since.
* Fed Governor Daniel Tarullo on Tuesday said 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.
* The dollar index hit a 3-1/2-week low on Tuesday. USD/
* Elsewhere in the physical markets, gold discounts in India
widened to a three-month high this week as retail demand
remained sluggish amid ample supplies and higher prices. Buying
elsewhere in Asia was also lacklustre.
MARKET NEWS
* Asian shares tottered on Wednesday, taking cues from Wall
Street's losses and pressured by a continued selloff in oil as
investors awaited consumer price data from China this session.
DATA AHEAD (GMT)
0130 China Consumer prices Sep
0130 China Producer prices Sep
0900 Euro zone Industrial output Aug
1230 U.S. Retail sales Sep
1400 U.S. Business inventories Aug
PRICES AT 0037 GMT
Metal Last Change Pct chg
Spot gold 1166.4 -2 -0.17
Spot silver 15.86 -0.03 -0.19
Spot platinum 981.49 -5.51 -0.56
Spot palladium 681 1.5 0.22
Comex gold 1166.5 1.1 0.09
Comex silver 15.87 -0.037 -0.23
COMEX gold and silver contracts show the
most active months