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Gold inches higher as investors weigh US debate, Fed rate path

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Gold inched higher, rising for a seventh day in its longest winning streak since February, as investors weigh the potential impact of November's US election and the outlook for a rate hike this year.

[MELBOURNE] Gold inched higher, rising for a seventh day in its longest winning streak since February, as investors weigh the potential impact of November's US election and the outlook for a rate hike this year.

Bullion for immediate delivery was 0.1 per cent higher at US$1,338.88 an ounce as of 11:21am in Sydney, according to Bloomberg generic pricing, as Democrat contender Hilary Clinton locked horns with Republican nominee Donald Trump in the first televised presidential debate.

Last week's indication from the Federal Reserve that it'll adopt a slower tightening path continues to lend bullion support.

Still, doubts over US interest rates and the outcome of the election are limiting gold's moves, Daniel Hynes, senior commodities strategist at Australia & New Zealand Banking Group Ltd, said by phone.

"There's still a degree of uncertainty floating around which is keeping everyone from putting in any aggressive positioning at the moment," he said. Ahead of the election "it'll be pretty neutral until the results are known," he said.

Bullion's gains reflect that investors hadn't fully anticipated the Fed's decision to leave its policy rate unchanged, even as as it signalled that a rise remains likely by year-end, according to Mr Hynes.

"The market wasn't quite there and hadn't been pricing in a lower-for-longer environment," he said.

Gold has risen 26 per cent this year and remains on track for a third quarterly gain amid indications of a slowing global economy. The metal could see increased volatility in the final quarter as Mr Trump's odds of winning the election increase, according to Citigroup Inc.

A Bloomberg Politics poll had Mr Trump and Mrs Clinton deadlocked ahead of the first of their debates.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.1 per cent.

Silver rose 0.3 per cent, while platinum added 0.2 per cent and palladium 0.4 per cent.

BLOOMBERG