Gold prices rebounds on hopes of a delayed U.S. rate hike

The Federal Reserve could delay raising rates, Gold prices rallied to a five-week high on Thursday, after the minutes of the Federal Reserve's July meeting fanned hopes that the central bank could delay raising interest rates till the very end of 2015. Could be December or 2016

Latest Gold prices for December delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,141.80 a troy ounce, the strongest level since July 17, before trading at $1,137.70 during European morning hours, up $9.80, or 0.87%. Good sign to investing more in gold

Meanwhile A day earlier, gold climbed $11.00, or 0.98%, to close at $1,127.90 after prospects for a rate hike in September by the Federal Reserve appeared dim after the release of July meeting minutes.

The Federal Reserve minutes showed about lagging inflation and the weak global economy. The FOMC minutes added that policymakers were concerned about "recent decreases in oil prices and the possibility of adverse spillovers from slower economic growth in China."

The safe haven currency US dollar index which tracks the greenback against a basket of six major rivals, was at 96.50 early Thursday, little changed on the day after falling sharply on Wednesday.

Investors and futures Traders now looked ahead to U.S. data later in the session for further indications on the strength of the economy and the timing of an interest rate hike.

Latest economic data, The U.S. is set to release data on initial jobless claims, existing home sales and manufacturing activity in the Philadelphia region later Thursday.

Despite a recent batch of upbeat economic data, some traders believe the Fed could postpone raising interest rates next month as officials are likely to remain concerned over global growth and inflation pressures due to China's shock currency devaluation move and weak commodity prices.

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. But prices have since rebounded almost 6% on hopes of a delayed U.S. rate hike.

Source : Investing