Gold extended gains for a fourth straight session on Wednesday, hitting a fresh three-month high, bolstered by a weaker dollar and comments from Federal Reserve officials cautioning against a rate hike this year.

Spot gold rose 0.3 per cent to $1,171.60 an ounce by 0347 GMT, after earlier climbing to $1,174.31 — its highest since July 6. Other precious metals were all tracking gold higher.

Non-farm payrolls data

Bullion has gotten a boost since the weak US non-farm payrolls report published earlier this month prompted the market to shift the expectations of a US rate hike to 2016 and sell the dollar.

Weak Chinese data on Wednesday added to global growth concerns, another factor investors believe could deter the Fed from hiking rates this year. Charts were also looking good for bullion, analysts said.

“The precious complex continues to look bid-ish and participants should be prepared for both gold and silver to break through their upcoming technical resistance points,’’ said James Gardiner, a trader at MKS Group.

The immediate resistance for gold was at $1,170-71, he said.

Dollar at 3-1/2 week low

Analysts at ScotiaMocatta said a close for gold above $1,170 should see the metal go all the way to $1,192. Helping gold’s move higher was a sluggish dollar, which was trading near its lowest in 3-1/2 weeks against a basket of major currencies as further signs of weakness in China fanned expectations that the Fed will have to wait longer before any policy tightening.

China consumer inflation

Consumer inflation in China cooled more than expected in September, while producer prices extended their slide to a 43rd straight month, adding to concerns about deflationary pressures in the world’s second-largest economy.

Fed rate hike

The Fed refrained from hiking rates at its September meeting, citing concerns about the global economy, although Fed Chair Janet Yellen said later that the central bank was on track to raise rates this year.

However, Fed Governor Daniel Tarullo had said on Tuesday the Fed should not hike interest rates this year, in comments that point to sharp divisions within the US central bank over America’s readiness for higher rates.

Tarullo, who rarely comments in public on monetary policy, is the second Fed governor this week to urge caution on the timing of rate hikes.

Fed Governor Lael Brainard had on Monday said the Fed should hold off on rate hikes until it is clear that trouble in China and other international risks will not push the US recovery off course.

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