Gold steadies, supported by weak U.S. export data

By Mariana Ionova

LONDON (Reuters) - Gold steadied on Wednesday, supported by sluggish U.S. economic data which increased expectations that the Federal Reserve will delay raising U.S. interest rates until next year.

Spot gold rose 0.1 percent to $1,147.91 an ounce by 0934 GMT, after earlier touching $1,152.90, its highest level since Sept. 24.

American exports were hit by an ailing global economy in August and imports from China surged, fuelling the largest expansion of the U.S. trade deficit in five months, data showed on Tuesday.

The figures, which followed a weak nonfarm payrolls report last week, bolstered expectations that the Fed will delay raising rates until 2016.

"I think the market sees gold taking advantage of the decision by the Fed not to raise rates and doesn't see any scope for the committee to raise rates anytime soon," said Robin Bhar, head of metals research at Societe Generale. "That's given a bit of breathing space to gold."

Gold has come under pressure from expectations that the Fed is set to hike interest rates this year, potentially lifting the opportunity cost of holding non-yielding bullion.

Fed Chair Janet Yellen said last month she expected the U.S. central bank to begin raising rates this year, but weak U.S. economic data and caution about the global economy have prompted many to push back expectations.

A possible delay in a rate hike has also weighed on the dollar, which has been supportive for the gold market by making the metal cheaper for holders of other currencies.

Concerns about the health of the global economy were reinforced on Wednesday when data showed German industrial output for August posted its sharpest drop in a year.

The International Monetary Fund also fuelled concerns when it cut its global growth forecasts for a second time this year on Tuesday, citing weak commodity prices and a slowdown in China.

Among other precious metals, silver eased 0.1 percent to $15.86, snapping a three-day rally that saw it rise to a 3-1/2-month high of $16.08 a day earlier.

Platinum rose 0.3 percent to $936.24 after falling to a near seven-year low last week on fears that the Volkswagen emissions scandal could hurt demand for diesel cars, in which the metal is used for catalysts.

Palladium slipped 0.2 percent, after rising near its highest level since June in early trading.

(Reporting by Mariana Ionova; Editing by Pravin Char)