By Arpan Mukherjee Gold edged lower in Asia Tuesday, with prices expected to bounce higher on dip buying though near-term market sentiment is likely to be influenced by the U.S. Federal Reserve policy-setting committee's meeting that starts later in the day. At 0438 GMT, spot gold was at $1,725.04 a troy ounce, down $4.46 from its previous close. "A light bounce toward the $1,740/oz level can't be written off here," Triland Metals said in a report. The yellow metal is trading 2.60% lower since the start of the month. Analysts noted that bargain hunting could emerge after the recent pullback in prices. ANZ analysts said in a report that there was a "slight improvement" in physical demand for gold Monday after spot gold hit a multi-week low. In the near term, markets could be positioning ahead of the Federal Open Market Committee's meeting, as the Fed has previously talked up its capacity to support the U.S. economy, they noted. However, over the longer term, market conditions remain supportive of a strong gold price amid low interest rates in key economies such as the U.S., said Paul Burton, a senior equities analyst at metals consultancy GFMS. "We will probably see $1,800/oz taken out again [this year]. The first quarter of next year may see a new high and $2,000/oz taken out," Mr. Burton added. Spot silver was at $32.24/oz, down 21 cents from its previous close. The metal is expected to rally later this year as gold strengthens, Societe Generale analyst Robin Bhar said in a report. However, in the near term, the technical picture has deteriorated and thus silver remains "vulnerable to further correction." The physical market also remains uncertain, though demand for the metal has strengthened in India as the festival season has started, he said. "Industrial demand remains under pressure with persistent uncertainty over excess solar cell capacity," he added. Spot platinum was at $1,602/oz, down $4, and palladium was at $618.21/oz, down $5.79. Against the backdrop of weak demand, platinum prices remain "wide open to correction" in case there is a resolution on a labor dispute at Anglo American Platinum Ltd. (AMS.JO, AGPPY), Standard Bank analysts said in a report. --Rhiannon Hoyle and Clementine Wallop also contributed to this article. Write to Arpan Mukherjee at arpan.mukherjee@wsj.com

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