* Fed meeting on Tuesday-Wednesday to be market focus
* Oil, U.S. and European stock markets fall
* Coming up: FOMC statement Wednesday at 1900 GMT
(Adds comment, byline, NEW YORK dateline; updates prices)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Jan 25 Gold rose 1 percent on
Monday as the dollar edged lower on renewed weakness in oil and
stock markets, with concerns over the global economic outlook
raising questions about the U.S. Federal Reserve's pace of
interest rate tightening.
The Federal Open Market Committee will meet Tuesday and
Wednesday, and is widely expected to leave its federal funds
rate unchanged at 0.25-0.50 percent.
Spot gold was up 0.6 percent at $1,104.95 an ounce at
2:34 p.m. EST (1934 GMT), after rising 1 percent to $1,108.50.
"There is a greater consensus that there is going to be a
further decline in financial asset classes (equities) this
year," said Ross Norman, CEO of bullion broker Sharps Pixley.
"But I don't think we are going to see Armageddon or a
complete wipeout, more likely a correction in the markets."
U.S. gold for February delivery settled up 0.8
percent at $1,105.30 an ounce.
Traders awaited the Fed's statement on Wednesday after a
two-day meeting as expectations for a March rate increase
started to fade. Economists polled by Reuters now forecast three
hikes in 2016 rather than the four initially floated by the Fed.
"The key question is whether the central bank will continue
its rate hiking cycle in March or postpone it until June or
later," said Fawad Razaqzada, technical analyst for Forex.com,
adding that the probability of a hike in March is below 30
percent and around 50 percent in June.
The U.S. government will release its first reading on
fourth-quarter economic growth on Friday. Economists polled by
Reuters suggest U.S. GDP growth of 0.80 percent in
October-December and annual expansion of 2.5 percent in 2016.
Hedge funds and money managers increased their bullish bets
in COMEX gold and silver in the week to Jan. 19, data showed
Spot platinum rallied 4 percent to $862.90 per ounce,
a two-week high, in sharp contrast to last week's seven-year
Impala Platinum (Implats), the world's No. 2
producer of the precious metal, said it was too early to assess
the production impact of a weekend fire in South Africa.
"The fire generated some buying and then it went through the
$850 level and generated more buying," said Giovanni Staunovo,
commodities analyst at UBS Wealth Management in Zurich, adding
that it looked like short-covering.
Spot silver rose 1.5 percent to $14.22 an ounce and
palladium turned down 0.7 percent to $490.40.
(Additional reporting by Manolo Serapio Jr in Manila; Editing
by Greg Mahlich and Andrew Hay)