PRECIOUS-Gold returns to near record high as dollar drops

SINGAPORE, Nov 3 (Reuters) - Gold rose to its strongest in
nearly two weeks on Tuesday, hovering within sight of last
month's record, as the U.S. dollar dropped on data showing
further evidence of an economic recovery.

But trading was expected to be light, with Japanese
speculators away for a holiday.

FUNDAMENTALS

* Spot gold XAU= was quoted at $1,063.60 an ounce at 0042
GMT, up $4.45 from New York's notional close -- not far from a
lifetime high of $1,070.40 struck on Oct. 14.

* U.S. gold futures for December delivery GCZ9 added
$10.2 an ounce at $1,064.200 on the COMEX division of the New
York Mercantile Exchange, within sight of last month's record
of $1,072 an ounce.

* The International Monetary Fund said on Monday it sold
200 tonnes of gold to the Reserve Bank of India for a total of
$6.7 billion as part of the global institution's plans to
increase its lending resources. [ID:nN02468120]

* AngloGold Ashanti lowered its annual production target
for the second straight quarter after suspending output at a
South African mine for safety checks. [ID:nL2266048]

* In an interview with Reuters at the London Bullion Market
Association conference, Anglo said it may accelerate closing
its hedgebook if conditions are right. [ID:nL2393287].

* The world's largest gold-backed exchange-traded fund,
SPDR Gold Trust (GLD), said its holdings stood at 1,103.519
tonnes as of Nov 2, unchanged from the previous business day.
[GOL/SPDR]

MARKET NEWS

* The U.S. dollar and the yen edged down on Tuesday, while
the Australian dollar extended gains ahead of a central bank
meeting where interest rates are widely expected to be lifted
by a quarter of a percentage point. [USD/]

* The U.S. Federal Reserve starts its two-day meeting on
Tuesday and, while it is expected to keep rates unchanged,
there is speculation that it might drop or alter its pledge to
keep rates low for an "extended period". [nFEDAHEAD].

* U.S. crude futures held steady above $78 barrel on
Tuesday, after rising the previous day when a trio of U.S.
economic reports with positive news pushed Wall Street higher
and took the oil market with it. [O/R]

* U.S. stocks rose on Monday after another round of solid
economic reports but pulled off session highs after a Federal
Reserve official's warning about banks' loan losses. [.T]

* India's front-month gold future contract on the Multi
Commodity Exchange of India Ltd (MCX) struck a record high of
16,099 rupees per 10 grams on Monday, following a rise in
global gold due to a weaker dollar. [ID:nBMA006324]

DATA EVENTS

* The following data is expected on Tuesday: ECON

- U.S. FOMC Starts Interest Rate Policy Meeting

- U.S. Auto Sales for October

- ICSC/Goldman Sachs U.S. Chain Store Sales (1245
GMT) - Redbook Weekly U.S. Retail Sales (1355
GMT) - U.S. Factory Orders for September
(1500 GMT) - ABC U.S. Weekly Comfort Index
(1700 GMT) - API Weekly National Petroleum Report

(2130 GMT) - Markets in Japan are closed for a holiday

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PRICES
Precious metals prices at 0042 GMT
Metal Last Change Pct chg Day ago pct MA 30
RSI Spot gold $1063.60 $4.45 +0.42% +18.57% $860.10
60
Spot silver $16.59 $0.16 +0.97% +38.48% $11.29
44
Spot plat $1340.00 $6.00 +0.45% +1.32% $1330.74
52
COMEX gold $1064.50 $4.60 +0.43% +1.87% $1037.68
60
Currencies
Euro/dlr $1.480 -$0.007 -0.48% -1.32%
Dlr/yen 90.41 -1.79 -1.94% -1.85%
(Reporting by Lewa Pardomuan; Editing by Jonathan Leff)