September 20, 2017 / 3:57 AM / 3 months ago

PRECIOUS-Gold inches up ahead of Fed policy statement

    * Fed monetary policy statement due at 1800 GMT
    * Spot gold still targeting $1,299 per ounce -technicals
    * Platinum pulls away from near 7-week low

 (Recasts, updates prices)
    By Apeksha Nair
    Sept 20 (Reuters) - Gold inched higher in range-bound trade
on Wednesday as the dollar wavered, with investors cautious
ahead of the outcome of a two-day Federal Reserve meeting in the
United States.
    Spot gold        had risen 0.2 percent to $1,313.50 an ounce
by 0612 GMT.
    U.S. gold futures         for December delivery were up 0.5
percent at $1,317.40 an ounce. 
    "Donald Trump's comments overnight in regards to North Korea
have certainly added a bid to the precious complex, but all in
all very quiet ahead of the (Fed statement)," a Sydney-based
trader said, adding that the dollar was providing some support. 
    U.S. President Donald Trump escalated his standoff with
North Korea over its nuclear challenge on Tuesday, threatening
to "totally destroy" the country and mocking its leader, Kim
Jong Un, as a "rocket man".              
    Geopolitical risks tend to boost demand for safe-haven
assets such as gold and the Japanese yen. 
    The dollar edged lower against a basket of currencies       
and the yen        on Wednesday. Asian stocks were little
changed ahead of the Fed's monetary policy announcement later in
the day.                    
    The U.S. Fed is expected to announce its balance sheet
reduction plans and provide an outlook for interest rate hikes
for the rest of the year.                      
    "We suspect that the central bank will reiterate its dovish
stance and likely weaken the dollar in the process," INTL
FCStone analyst Edward Meir said in a note. 
    "We could see a modest bounce in gold over the next day or
two, but nothing that will take the precious metal outside of a
relatively tight trading range for the time being," Meir said. 
    A stronger dollar makes greenback-dominated bullion more
expensive for those holding other currencies. Higher interest
rates lead to higher bond yields and dampen demand for
non-interest bearing gold. 
    "The majority of the consensus is there will be one more
hike this year, and if that remains the case, gold should still
remain reasonably well supported with what's happening
geopolitically," the trader said. 
    "I think $1,300, $1,290 is certainly a good base for gold
unless the Fed changes its wording with regards to how many
hikes there will be in the coming months," the trader said.     
     
    Spot gold is still targeting $1,299 per ounce, said Reuters
technicals analyst Wang Tao.              
    Meanwhile, silver        edged 0.1-percent lower to $17.30
an ounce.
    Platinum        rose 0.7 percent to $954.60 an ounce, after
hitting its lowest since early August in the previous session. 
    Palladium        gained 0.7 pct to $914.75 an ounce, having
dropped to its lowest since mid-August on Tuesday. 

 (Reporting by Apeksha Nair in Bengaluru; Editing by Joseph
Radford and Tom Hogue)
  

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