* Gold faces technical resistance around $1,330/oz
* Fed rate hike in Sept seen off the agenda
(Updates prices; adds comment, second byline, NEW YORK
By Marcy Nicholson and Pratima Desai
NEW YORK/LONDON, Sept 14 Gold prices rose on
Wednesday, breaking a five-day decline as the dollar slipped
against a basket of currencies, with the market waiting for
clues on the timing of an increase in U.S. interest rates.
Spot gold was up 0.4 percent at $1,323.50 an ounce by
3:00 p.m. EDT (1900 GMT). It touched $1,315.27 on Tuesday, the
lowest in more than a week. U.S. gold futures settled up
0.18 percent at $1,326.10.
Expectations that the U.S. Federal Reserve will raise rates
next week have receded, putting pressure on the dollar, which
when it falls makes gold cheaper for holders of other
"The big picture is the Fed rate hike, which is going to be
the biggest factor for gold, so in the short term markets will
be looking at U.S. data," Natixis analyst Bernard Dahdah said.
"It's all about the opportunity cost of holding gold. Higher
interest rates make it more expensive to hold gold, which has
Markets are pricing in just a 15 percent chance that the Fed
will hike U.S. interest rates during its Sept. 20-21 meeting,
according to CME FedWatch. Many now expect a rise in December
after the U.S. presidential election.
Goldman Sachs puts the chances of a rate hike in December at
"We believe any decision to raise rates in 2016 will
ultimately be viewed as a misstep that increases financial and
economic risks, and this will be to gold's benefit," said Joe
Foster, portfolio manager and strategist of VanEck International
Investors Gold Fund in New York.
"In the meantime, however, the anticipation of a rate
increase and any attendant U.S. dollar strength could cause gold
to struggle," he added.
UBS Wealth Management Research said in a note that it held
its three-month price range at $1,275-$1,425 an ounce, but
raised its six- and 12-month forecasts to $1,350.
"Gold is open to setbacks in the short term, given the
elevated long speculative positioning and pessimistic rates
markets," UBS said.
Technically, initial resistance comes in around $1,330, near
the 21-day moving average.
"Gold is approaching the important $1,300-$1,310 support
zone, which has held incredibly well since the Brexit rally and
will be a key focus for traders in the short term," said Alex
Thorndike, senior precious metals dealer at MKS PAMP Group.
Spot silver was up 0.9 percent at $19.02 an ounce.
Platinum gained 0.2 percent at $1,034.20, while
palladium rose 0.8 percent to $656.90.
(Additional reporting by Swati Verma and Nallur Sethuraman in
Bengaluru; editing by Jason Neely and Alan Crosby)