SINGAPORE, Sept 18 (Reuters) - Gold firmed near a two-week
high on Friday and was on track to snap a three-week losing
streak after the Federal Reserve decided to hold U.S. interest
rates steady due to worries over the global economy.
FUNDAMENTALS
* Spot gold XAU= was flat at $1,130.70 an ounce at 0036
GMT, not far from a two-week high of $1,133.20 reached in the
previous session. The metal is headed for a 2-percent weekly
gain, following three weeks of losses.
* U.S. gold GCcv1 gained 1 percent to $1,130.40, also near
a two-week high
* Bullion got a boost on Thursday after the Fed kept
interest rates unchanged following a two-day policy meet, in a
bow to worries about the global economy, financial market
volatility and sluggish inflation at home.
* But the U.S. central bank maintained its bias towards a
rate hike sometime this year, while lowering its long-term
outlook for the economy. ID:nL1N11N244
* Gold had been weighed down all year on fears the Fed would
soon hike interest rates from record-lows for the first time in
nearly a decade. Higher rates could dent demand for non-interest
paying bullion, while boosting the dollar.
* Following the Fed's decision on Thursday, the dollar
slumped to a three-week low against a basket of major
currencies, supporting gold prices. USD/
* Bullion's relief rally, however, might not last long as
the central bank's move to refrain from raising rates this week
only adds to the uncertainty over the timing of an eventual rate
hike.
* The global market volatility that upended investors over
the last six weeks may last deep into autumn now that the Fed
has decided to keep interest rates unchanged, several equity and
fixed income portfolio managers said.
* A majority of Wall Street's top banks now expect the Fed
to begin hiking rates in December, according to a Reuters poll
conducted on Thursday.
* Physical demand from Asia wasn't offering much support to
gold prices.
* Gold discounts in India, the world's second-biggest
consumer, widened this week as dealers struggled to offload
stocks amid sluggish demand.
* For the top stories on metals and other news, click
MARKET NEWS
* The dollar took back some lost ground in Asian trading on
Friday after skidding to three-week lows against the euro and a
basket of currencies. Asian shares are likely to fall. USD/
MKTS/GLOB
DATA AHEAD (GMT)
0130 China House prices Aug
0800 Euro zone Current account Jul
1400 U.S. Leading index Aug
PRICES AT 0036 GMT
Metal Last Change Pct chg
Spot gold 1130.7 -0.5 -0.04
Spot silver 15.1 -0.02 -0.13
Spot platinum 974.05 -6.55 -0.67
Spot palladium 601.5 -6.25 -1.03
Comex gold 1130.4 13.4 1.2
Comex silver 15.12 0.136 0.91
Euro 1.141
DXY 94.541
COMEX gold and silver contracts show the
most active months