May 1, 2018 / 4:21 AM / in a year

PRECIOUS-Gold dips to six-week low on firm dollar ahead of U.S. Fed meet

    * Investors cautious ahead of Tue-Wed FOMC meeting -
    * U.S. extends tariff exemption by 1 month for major allies

 (Adds quote, updates prices)
    By Eileen Soreng
    BENGALURU, May 1 (Reuters) - Gold prices fell to a six-week
low on Tuesday as the dollar firmed near 3-1/2-month highs, with
investors awaiting direction on U.S. monetary policy from the
U.S. Federal Reserve.
    Spot gold        was down 0.3 percent at $1,310.77 per ounce
at 0716 GMT. Prices hit $1,310.01 earlier in the session, their
lowest since March 21. 
    U.S. gold futures         for June delivery declined 0.5
percent to $1,313.10 per ounce. 
    "The recent U.S. dollar revival has negatively impact gold
as the intensity of the USD correction has caught most traders
by surprise," said Stephen Innes, APAC trading head at OANDA.
    The dollar index        edged up 0.1 percent to 91.961 as
investors awaited the Fed's policy decision and key employment
data due this week for fresh clues on the strength of the U.S.
    While the U.S. central bank is widely expected to stand pat
on policy, market participants will be closely watching the
two-day meet concluding on Wednesday for hints of an interest
rate hike in June.        
    The greenback touched its highest since Jan. 11 at 91.986 on
Friday. It climbed 2 percent in April, recording its biggest
monthly gain since November 2016. 
    "Investor are also remaining cautious ahead of this week's
two day FOMC meeting," said analysts at ANZ in a note. 
    Higher interest rates tend to boost the U.S. dollar and push
bond yields up, pressuring gold prices by increasing the
opportunity cost of holding non-yielding bullion. 
    "Support-wise (in gold), we are nearing some key technical
levels with the 200 DMA at $1,304 and the psychological $1,300
level below that, expect broad support between $1,300 and the
overnight low of $1,310," MKS PAMP said in a note.
     Meanwhile, U.S. stock futures edged up and Australian
shares hit seven-week highs after the United States extended the
deadline for imposing steel and aluminium tariffs on imports
from Canada, the European Union and Mexico, and offered
permanent exemptions for several other allies.            
    Most markets in Asia are closed for a Labour Day holiday.
    Among other precious metals spot silver        fell 0.4
percent to $16.24 per ounce. Prices touched their lowest in
about a month, at $16.18, in the previous session.
    Platinum        was down 0.2 percent at $901.50 per ounce.
Prices fell to $896.50 earlier in the session, their lowest
since Dec. 18, 2017.
    Palladium        fell 0.7 percent to $958.00 per ounce.
Prices touched a near three-week low of $955.72 earlier in the

 (Reporting by Eileen Soreng in Bengaluru; Editing by Tom Hogue
and Vyas Mohan)
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