PRECIOUS-Gold rises from four-week low as equities decline, Fed in focus – Reuters


* Gold reverses some of previous day’s 1.4 percent slide

* GLD fund sees 4-tonne outflow, largest in nearly 6 weeks

* GRAPHIC: Asset returns-link.reuters.com/dub25t

(Updates prices, adds comment)

By Jan Harvey

LONDON, Sept 10 (Reuters) – Gold rose from four-week lows on
Thursday as European stocks snapped a three-day run of gains,
but traders remained cautious as they awaited fresh clues on the
timing of a U.S. rate hike.

The precious metal fell 1.4 percent on Wednesday, its
biggest one-day drop in nearly two months, as strength in stocks
and the dollar pushed prices through key chart levels to
$1,101.11 an ounce, the lowest since Aug. 11.

Prices could fall further ahead of the Federal Open Market
Committee(FOMC) meeting on Sept. 16-17, traders said.

Spot gold was up 0.5 percent at $1,110.81 an ounce at
1350 GMT, while U.S. gold futures for December delivery
were up $8.10 an ounce at $1,110.10.

“It’s very hard to work out what the gold market is pricing
in regarding the probability of a hike and what the outcome will
be if the FOMC surprises,” ICBC Standard Bank strategist Tom
Kendall said.

“The one thing that we can say is that the market at this
time of year should be enjoying a bit of a seasonal boost,
particularly from the Indian subcontinent, and at the moment,
that market is very quiet.”

Concerns over slowing growth in China and mixed economic
data have increased uncertainty about the timing of a U.S. rate
increase, which had been expected as early as this month.

Bullion has benefited in recent years from ultra-low rates,
which cut the opportunity cost of holding bullion while keeping
the dollar in check. But expectations that rates will rise soon
have pushed the metal down more than 6 percent this year.

Prices could head back towards July lows after bullion broke
through some key chart levels on Wednesday, technical analysts
at ScotiaMocatta said. The July low of $1,077 was the weakest
since February 2010.

“With regards to support, $1,100 is a key level for the
yellow metal, while $1,115-$1,120 will provide resistance to a
move higher,” MKS said in a note.

World stocks and commodities fell on Thursday after four
straight days of gains following a drop in oil prices overnight
and more uncertain news from China, Japan, Brazil and New
Zealand.

Investor interest in gold has been tepid. SPDR Gold Trust,
the world’s largest gold-backed exchange-traded fund, said its
holdings fell 0.61 percent to 678.18 tonnes on Wednesday, the
biggest drop in nearly six weeks.

Silver was up 1.1 percent at $14.77 an ounce,
platinum was up 0.1 percent at $980.25 an ounce and
palladium was up 1.3 percent at $586.25 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Dale Hudson and Susan Thomsa)