Metals

Gold up as Fed minutes cool rate hike prospects, weigh on dollar

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Gold rose on Thursday, buoyed by a weaker dollar after minutes from the U.S. Federal Reserve's July meeting showed policymakers were divided over whether to raise interest rates soon.

Members of the Fed's rate-setting Federal Open Market Committee were generally upbeat about the U.S. economy and labour market, but several said any slowdown in future hiring would argue against a near-term hike.

Spot gold was up 0.33 percent at $1,352.61 an ounce, on track for a fourth straight day of gains. U.S. gold climbed 0.67 percent to $1,357.80 an ounce.

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"The market has been trying to read into whether Fed official comments for a September rate hike will be repeated by Janet Yellen next week but there is no clarity yet," Saxo Bank senior manager Ole Hansen said.

"As a result, gold is supported but struggling to break above $1,357, the next technical resistance level."

The dollar fell 0.58 percent against a basket of six major currencies, after plunging to its lowest in more than seven weeks.

A weaker dollar makes gold cheaper for holders of other currencies.

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On Thursday, New York Fed President William Dudley said the last two months of job growth "helped allay concerns that arose earlier this year that job growth was beginning to stall."

He did however not comment on his remarks earlier this week that the Fed could possibly raise rates in September.

Gold is sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.46 percent to 957.78 tonnes on Wednesday.

The Chicago Mercantile Exchange (CME) on Wednesday lowered COMEX 100 Gold Futures (GC) maintenance margins for speculators by 10 percent to $5,400 per contract from $6,000 for August and September 2016.

Silver was up 0.33 percent at $19.73 an ounce, after touching a more than three-week low on Wednesday.

Platinum rose 1.58 percent to $1,130.60, after hitting a three-week low of $1,099.74 in the previous session, while palladium was up 2.89 percent at $712.