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MTECHTIPS:-Gold trades close to 4-week low on Fed rate hike worries

MTECHTIPS:-Gold trades close to 4-week low on Fed rate hike worries

Gold futures struggled near the lowest level in four weeks on Thursday, amid worries the Federal Reserve will increase interest rates when it meets on September 16-17. Gold for December delivery on the Comex division of the New York Mercantile Exchange inched up $4.30, or 0.39%, to trade at $1,106.30 a troy ounce during European morning hours. A day earlier, gold tumbled to $1,100.10, a level not seen since August 11, after data showed that the number of job openings in the U.S. rose to the highest level on record in July. The report boosted optimism over the health of the labor market and supported the case for a rate hike later this month. The timing of a Fed rate hike has been a constant source of debate in the markets in recent months. Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise. Elsewhere in metals trading, copper for December delivery on the Comex division of the New York Mercantile Exchange rose 1.9 cents, or 0.77%, to trade at $2.456 a pound, not far Wednesday’s seven-week high. Copper’s gains came after weak China inflation data reinforced views that Beijing will roll out fresh support measures soon for the world’s second largest economy. Government data showed that Chinese producer prices fell by a more-than-expected 5.9% in August, the 42nd straight monthly decline and the worst reading since October 2009. Consumer prices rose 2.0% last month, above expectations for 1.8% and up from 1.6% in July. Non-food inflation remained subdued at 1.1%, unchanged from a month earlier.
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