Gold prices hit two-week high as dollar slides amid imminent Fed rate hike

Gold prices hit a two-week high on Tuesday as the dollar fell on fading prospects of an imminent increase to US interest rates and expectations of stronger demand from the physical market. Spot gold was up 0.2 per cent at $1,2361 an ounce by 0913 GMT, having touched $1,238.76, its highest since July 3. US gold futures rose 0.3 per cent to $1,236.80. The dollar sank to a 10-month low against a basket of currencies, making dollar-denominated metals cheaper for holders of other currencies, which could boost demand. "We see gold averaging around $1,300 over the third quarter," said ING commodities strategist Warren Patterson. "Indian imports are rising after the very poor year last year. We expect that trend to continue even with the tax changes." Commodity Trading Tips

Data from consultancy GFMS shows India's gold imports climbed to an estimated 75 tonnes in June from 22.7 tonnes a year ago. For the first half of the year imports rose to 514 tonnes, up 161 per cent from a year earlier. GFMS analysts said the jump was spurred by Indian consumers buying ahead of July's increase in the goods and services tax on gold to 3 per cent from 1.2 per cent. Weighing on the dollar is the collapse of U.S. President Donald Trump's efforts to deliver a new healthcare bill in a market deeply worried by the pace of America's economic growth. "The Fed is unlikely to be able to increase rates again soon, possibly not again this year, and it will certainly not rush to reduce its balance sheet," ICBC Standard Bank analysts said in a note. Nifty Trading Tips