RTRS:PRECIOUS-Gold holds ground as investors eye Fed stimulus outlook
* Investors edgy ahead of Fed statement
* Gold recovers from early losses, still below 5-week high
* U.S. dollar strength weighs on bullion
* Coming up: Fed statement at 1800 GMT
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Oct 30 (Reuters) - Gold edged higher on Wednesday
as investors bet the Federal Reserve would stick to its
bullion-friendly stimulus measures but the metal was still
trading below five-week highs as a stronger dollar kept gains in
check.
Gold has gained about 7 percent from a three-month low hit
on Oct. 15 on hopes that weak U.S. data and the repercussions of
budget battles in Washington would prompt the Fed to delay the
winding-down of its $85 billion monthly bond purchases.
Spot gold ticked up 0.2 percent to $1,346.11 an ounce
at 0702 GMT after hitting a session low of $1,339.14 earlier.
Gold prices slipped on Tuesday from the previous session's
five-week high as traders took profits after the dollar
strengthened, raising the possibility that Fed expectations
might already be priced into markets.
"Gold has always been right up there as the commodity that
is most exposed to any Fed decision to cut back on bond
purchases," said Song Seng Wun, an economist at CIMB.
"The (Fed) meeting will decide whether more money will be
taken off the table or whether there will be a rebound."
Song said any rise in gold would depend on U.S. economic
data, among other key factors determining when the Fed moves to
reduce its stimulus.
The Fed will make a statement later on Wednesday at the end
of its two-day meeting. It is widely expected to say it will
continue with its stimulus measures and will not reduce its
asset purchases.
Chinese gold prices recovered slightly on Wednesday after
ending at a discount to global prices in the previous session
for the first time this year. Fears of a credit tightening had
prompted Chinese investors to sell bullion for cash.
Indian premiums stayed near record highs due to a supply
crunch.
Precious metals prices 0702 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1346.11 2.42 +0.18 -19.61
Spot Silver 22.62 0.10 +0.44 -25.30
Spot Platinum 1463.00 3.00 +0.21 -4.69
Spot Palladium 744.50 0.50 +0.07 7.59
COMEX GOLD DEC3 1346.20 0.70 +0.05 -19.67 18408
COMEX SILVER DEC3 22.68 0.18 +0.81 -25.18 6162
Euro/Dollar 1.3746
Dollar/Yen 98.20
COMEX gold and silver contracts show the most active months
