By Arpan Mukherjee Of DOW JONES NEWSWIRES WELLINGTON (Dow Jones)--Gold was trading in a narrow range in Asia with investors reluctant to take new positions amid cautious trading ahead of the much-awaited outcome of the U.S. Federal Reserve's two-day policy meeting. At 0540 GMT, spot gold was at $1,809.40 a troy ounce, up $4.60 from its previous close. "Investors are mostly on the sidelines and prices are likely to remain range-bound ahead of the Federal Reserve's decision," said a Hong Kong-based trader. Much would depend on the extent of the Fed's determination to push with a solution. If Chairman Ben Bernanke comes out with another stimulus by extending the average duration of the Fed's asset holdings, it is unlikely to have a major impact on markets as current price levels have factored that in already. But "if there is additional guidance, or something more accommodative comes out of the meeting, the dominant uptrend in gold would likely start to re-exert itself," Peter Grant, economist at USAGOLD-Centennial Precious Metals. It that happens, gold which had gained close to 1.5% in the spot market Tuesday on dip buying, is likely to move higher amid continuing euro-zone debt fears, traders said. "For now, gold remains range-bound and a catalyst is needed before it can move higher," said Phillip Futures investment analyst Ong Yi Ling. He said a sustained break above $1,850/oz is needed for gold to continue its long-term uptrend. Ong said he had a neutral bias now with prices expected to move sideways in the short-term. Meanwhile, the message coming from traders in Europe was more bullish. While Swedish lender SEB said it expects gold to move toward $2,300/ton before starting to ease, delegates at the London Bullion Market Association annual conference in Montreal pegged the average price at $2,019/oz by November 2012. SEB said silver has also benefited from a strong rally this summer. In the current economic environment, "it is difficult to be bullish gold without being bullish silver," the banks said. However, the house considers silver as a "less attractive alternative" to gold. At 0540 GMT, spot silver was at $40.04/oz, up 30 cents while platinum was at $1,783/oz, up $7 and palladium at $718/oz, up $4 from its previous close. In the case of platinum, investor inflows have picked up and physical holdings in exchange-traded funds have moved higher through August and September, said Standard Chartered analyst Dan Smith. Patinum looked attractive relative to gold in the medium-term, he said. Smith said palladium prices have been hit by weaker risk appetite and physical ETF holdings have declined 2.3% since the start of the month. -By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com

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