* Gold climbs to highest in nearly 2 weeks
* Weak U.S. data hurts dollar
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Oct 7 (Reuters) - Gold climbed to its highest in
nearly two weeks on Wednesday, as more sluggish U.S. economic
data supported views that the Federal Reserve would delay a rate
hike to next year.
Spot gold had risen 0.4 percent to $1,151.60 an ounce
by 0643 GMT, after earlier hitting $1,152.90, its highest since
Sept. 24. Liquidity was thin in Asian hours with top consumer
China out on a holiday.
Data on Tuesday showed that U.S. exports took a hit from an
ailing global economy in August and imports from China surged,
fuelling the largest expansion of America's trade deficit in
five months.
The data, following a weak nonfarm payrolls report last
week, has triggered a drop in the dollar and pushed expectations
of a rate hike to next year.
"We have to suspect that as U.S. macro data starts to
deteriorate, the dollar will likely continue to weaken from
here, providing further upside to impetus for gold," said INTL
FCStone analyst Edward Meir.
A softer dollar would make gold cheaper for holders of other
currencies, while a delay in rate hike could also support
non-interest-paying bullion.
Gold has benefited in recent years from ultra-low rates,
which cut the opportunity cost of holding the metal.
Fed Chair Janet Yellen said last month she expected the U.S.
central bank to begin raising rates this year, but weak U.S.
economic data since then and caution about the global economy
has prompted many to push out expectations.
The International Monetary Fund cut its global growth
forecasts for a second time this year on Tuesday, citing weak
commodity prices and a slowdown in China and warned that
policies aimed at increasing demand were needed.
The Fed should be communicating its views of the economy
well enough that markets will not be taken by surprise by an
eventual interest-rate hike, San Francisco Fed President John
Williams said on Tuesday.
Elsewhere, the value of China's gold reserves stood at $61.2
billion at the end of September, down from $61.8 billion at
end-August, the People's Bank of China said on Wednesday.
Among other precious metals, silver XAG= rose for a fourth
straight day, trading near a 3-1/2-month high of $16.08 reached
in the previous session.
Platinum XPT= rose 1 percent after having fallen to a near
seven-year low last week on fears that the Volkswagen (XETRA:VOWG) emissions
scandal could hurt demand for diesel cars, where the metal is
used in catalysts.
Palladium XPD= also gained and was trading near its
highest since June.
PRICES AT 0643 GMT
Metal Last Change Pct chg
Spot gold 1151.6 4.9 0.43
Spot silver 15.95 0.08 0.5
Spot platinum 943.5 10.05 1.08
Spot palladium 709.45 6.95 0.99
Comex gold 1151.3 4.9 0.43
Comex silver 15.97 -0.014 -0.09
COMEX gold and silver contracts show the
most active months