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Gold prices rebounded from an eight-month low after the growth index of manufacturing activity in New York in September was the highest in four years.
Federal Reserve Bank of New York said that the business activity index rose this month to 27.5 from 14.7 in August. Analysts had expected the index to rise only to 15.0 in September. On the index, a reading above 0.0 reflect the increase in activity, below - its decline.
Optimistic data added to speculation that the Fed is already in the upcoming meeting this week may give a hint of an early increase in interest rates.
The dollar was strong demand amid speculation that Fed officials are taking a more aggressive stance, perhaps, not to mention the intention to keep rates low for "an extended time."
The Central Bank is expected to reduce the amount of the asset purchase program by another $ 10 billion on its way to full completion in October and higher interest rates in mid-2015.
For storage of gold funds are required, and it is inferior to the competition with earning assets when interest rates rise.
The cost of the October gold futures on the COMEX today rose to 1238.00 dollars per ounce.
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