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MTECHTIPS:-Gold rallies as weak import data adds uncertainty to Sept. rate hike

MTECHTIPS:-Gold rallies as weak import data adds uncertainty to Sept. rate hike

Gold futures rebounded from a massive sell-off one session earlier amid a sharply weaker dollar, as investors wrestled with the continued uncertainty related to a potential interest rate hike by the Federal Reserve next week. On the Comex division of the New York Mercantile Exchange, gold for December delivery traded in a tight range between $1,102.80 and $1,113.90 an ounce, before settling at $1,109.80 up 7.90 or 0.72%. After touching down to multi-year lows in late-July below $1,080 an ounce, gold is up by more than 2% over the last six weeks. The precious metal has still closed lower in 12 of the last 16 sessions as next week’s highly-anticipated Federal Open Market Committee meeting nears. Gold likely gained support at $1,102.10, the low from Sept. 9 and was met with resistance at $1,140.40, the high from Sept. 2. On Thursday morning, weak import data last month from the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) appeased dovish sentiments at the Fed for a delayed rate hike. U.S. import prices fell by 1.8% in August, the BLS said in a monthly report, extending previous losses of 0.9% in July. On a year-over-year basis, imported inflation has fallen by 11.4% — its lowest amount since September, 2009. The FOMC is keeping a close eye on temporary headwinds restraining inflation as it decides whether to raise its benchmark Federal Funds Rate at next week’s two-day meeting, which concludes on Thursday. Nearly a decade has passed since the FOMC has lifted the rate, which banks use to lend to other institutions on overnight loans. The Fed Funds Rate has remained at its current level between zero and 0.25% since December, 2008.

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