By Tatyana Shumsky 

Gold prices rushed higher, shaking off earlier losses Thursday, as a dovish tone in the Federal Reserve's meeting minutes bolstered investor speculation that officials would hold off on raising interest rates.

In response, the most actively traded contract, for December delivery, rose 0.2% to hit the day's high of $1,150.90 a troy ounce on the Comex division of the New York Mercantile Exchange.

Fed policy-committee members highlighted concerns about stubbornly low inflation and the escalating threat that China's economic slowdown would trip up growth in the U.S. All but one member concluded that, despite stronger domestic growth and improved labor-market strength, economic conditions didn't warrant tighter monetary policy.

In the weeks since the Fed's Sept. 16-17 meeting, economic reports showed U.S. hiring gains slowed in August and expansion in manufacturing activity lost steam.

"The Fed felt that global weakness was enough to keep interest rates at zero, and now we have new data points which talk about domestic weakness, " said James Cordier, president of OptionsSellers.com in Tampa, Fla. "If you add that up...it's hard to imagine an interest rate increase in December," he said.

Any delay to higher rates benefits gold, which pays its holders nothing and would struggle to compete with yield-bearing investments once rates climb.

Gold futures had settled down 0.4% at $1,144.30 an ounce roughly half an hour before the Fed minutes were released, but prices rebounded from those losses in after-market trading.

Write to Tatyana Shumsky at tatyana.shumsky@wsj.com

 

(END) Dow Jones Newswires

October 08, 2015 15:04 ET (19:04 GMT)

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