September 19, 2017 / 10:21 AM / a year ago

PRECIOUS-Gold edges up as dollar retreats ahead of Fed meeting

    * Fed talks in focus for clues on timing of rate hike
    * Chart support seen at $1,300/oz-technical analyst
    * GRAPHIC-2017 asset returns:

 (Updates prices)
    By Jan Harvey
    LONDON, Sept 19 (Reuters) - Gold edged off the previous
day's two-week low on Tuesday as the dollar eased ahead of a
Federal Reserve meeting which is expected to provide more clues
this week on the pace of U.S. monetary tightening.
    The dollar fell 0.3 percent against the euro ahead of the
two-day talks, with markets awaiting guidance on whether the Fed
would signal a further hike in interest rates at its December
    Spot gold        was up 0.1 percent at $1,308.26 an ounce at
1145 GMT, off the previous day's low of $1,304.10. U.S. gold
futures        for December delivery were up $1.00 an ounce at
    The U.S. central bank is also expected to announce moves to
shrink its $4.5 trillion asset portfolio, built up to spur
economic growth in the wake of the financial crisis that began a
decade ago.              
    "Normally you would expect gold to suffer from a reduction
of the balance sheet, as it benefited when it was increased,"
Capital Economics analyst Simona Gambarini said. 
    "But as the Fed has been quite open about its intentions to
make this happen, I don't think, unless it announces that it
intends to reduce by a lot more than markets expect, that that
will happen."    
    The metal has fallen 4 percent since hitting a more than
one-year high of $1,357.54 earlier this month, as the dollar
recovered from lows and as fading concerns over North Korea's
nuclear ambitions cut demand for bullion as a haven from risk. 
    With attention now back on the Fed and the potential for
higher interest rates, which lift the opportunity cost of
holding non-yielding bullion, gold could edge back towards
$1,300, analysts said. 
    Worries over North Korea could still prompt price gains,
however. Its stand-off with the United States is likely to take
centre stage at the U.N. General Assembly meeting on Tuesday,
where U.S. President Donald Trump is set to speak for the first
    Gold should run into chart support either side of $1,300,
independent technical analyst Cliff Green told the Reuters
Global Gold Forum on Tuesday, "a combination of previous
corrective lows and congestive areas, where good two-way trading
was experienced on the way up."
    "If this gives way, we could see $1,280 before fresh demand
is stimulated," he said.  
    Among other precious metals, silver        was down 0.3
percent at $17.16 an ounce, while platinum        was 0.3
percent lower at $957.08 an ounce. Palladium        was down 1.1
percent at $925.10. 

 (Reporting by Jan Harvey; additional reporting by Apeksha Nair
in Bengaluru; editing by Louise Heavens/Jane Merriman/Alexander
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