Gold drops ahead of Fed rate move, off 28-year peak

SINGAPORE (Reuters) - Gold extended losses on Wednesday ahead of a rate decision by the U.S. Federal Reserve as speculators booked profits from this week's 28-year highs.

-- Spot gold fell to $778.20/778.90 an ounce from $781.25/781.85 late in New York on Tuesday. Gold rallied to its best level since January 1980 at $794.40 on Monday, on record-high crude oil and a tumbling dollar.

-- The precious metal was likely to find support at $771 an ounce, with resistance pegged at $795. Dealers expect a sharp correction if the Fed does not cut rates at its two-day policy meeting later Wednesday.

-- The benchmark October 2008 gold futures on the Tokyo Commodity Exchange fell 16 yen per gram to 2,895 yen, reflecting losses in New York's COMEX market.

-- The Fed is widely seen slashing the key Fed funds rate by a quarter-percentage-point to 4.5 percent to shield the economy from troubles in the housing sector, following an aggressive half-percentage-point rate cut last month.

-- The euro barely budged from late U.S. trade at $1.4435. In early trade, the single currency matched a record peak of $1.4442 hit on trading platform EBS on Tuesday, the highest since its launch in 1999.

-- The dollar edged up 0.1 percent against the yen to 114.75 yen.

-- NYMEX crude for December delivery fell 65 cents to $89.73 a barrel in Globex electronic trading on expectations that U.S. government inventory data due to be released later Wednesday would show a rise in domestic crude stocks.

-- Silver dipped to $14.13/14.16 an ounce from $14.18/14.22 late in New York on Tuesday, when it rallied to an 8-month high of $14.51 an ounce as it caught up with gold's gains.