US MIDDAY: gold rises

Gold higher early on Tuesday as a retreat in the dollar index helped the metal snap a four-day losing streak, but bullion remained close to 3-week lows as uncertainty over a looming US interest rate hike persisted. Spot gold was up 0.2 percent at $1,121.10 an ounce at 2:56 pm EDT (1856 GMT), while US gold futures for December delivery settled down 40 cents at $1,121 an ounce.
Spot prices hit their lowest since mid-August on Monday, at $1,116.20 an ounce, after Friday's hotly anticipated US payrolls data failed to provide clarity on the timing of the Federal Reserve's first interest rate rise in nearly a decade. Expectations for rising rates, which would lift the opportunity cost of holding non-yielding bullion while boosting the dollar, have pushed the metal 5 percent lower this year and remain gold's biggest driver, analysts said.
Trade is expected to be rangebound ahead of the Fed's next policy meeting on September 16-17. "Last week everyone was waiting for the non-farm payrolls data, and this week everyone's waiting for the FOMC (meeting) on the 17th," said MKS' head of trading Afshin Nabavi. "Investors need some kind of assurance on direction before getting into the market." Stock markets world-wide rallied on hopes of more stimulus measures in China and on strong German trade data, while copper and silver rallied after Glencore announced plans to shut down its loss-making copper mines.
The US dollar fell as much as 0.5 percent. "It's just optimism in all the markets as a result of China taking some action in the markets," said Phillip Streible, senior commodities broker for RJO Futures in Chicago, referring to the session's strength in gold. Gold has failed to attract strong investor interest as a safe haven despite the recent weakness in stocks due to worries over the Chinese economy, showing that the metal is struggling to find direction outside US monetary policy.
Silver was up 1.2 percent at $14.73 an ounce, while platinum was up 1.7 percent at $1,000 an ounce and palladium was up 1.9 percent at $586.25 an ounce. The platinum market deficit shrank in the second quarter, data from the World Platinum Investment Council showed, as rising mine supply and autocatalyst and jewellery recycling outstripped a much smaller increase in demand.