July 31, 2018 / 3:54 AM / a year ago

PRECIOUS-Gold trades in tight range ahead of U.S. Fed meeting

    * Dollar recovers vs yen after BOJ rate decision
    * Investor focus shifts to Fed policy meeting 
    * Spot gold biased to fall into range of $1,206-$1,214 -

 (Recasts, adds BOJ decision, comment, updates prices)
    By Apeksha Nair
    BENGALURU, July 31 (Reuters) - Gold prices were steady on
Tuesday within a tight range as investors adopted a
wait-and-watch approach ahead of a two-day monetary policy
meeting of the U.S. Federal Reserve. 
    Spot gold        was up about 0.1 percent at $1,222.15 an
ounce at 0705 GMT while U.S. gold futures         were 0.1
percent lower at $1,220.70 an ounce.
    The dollar strengthened versus the yen after Bank of Japan
made small tweaks to policy against market expectation of
drastic changes, limiting the upside potential for the yellow
    At the meeting that ended on Tuesday, the BOJ took measures
to make its massive stimulus programme more flexible and pledged
to keep interest rates "very low" for the time being.
    Later in the day, the U.S. Federal Reserve begins a two-day
monetary policy meeting. The central bank is widely expected to
stand pat on monetary policy, but investors will be paying close
attention to the central bank's tone for cues on the pace of
further interest rate hikes.
    "There's no clear direction for investors to really play on,
and I suppose until there's a bit more clarity from the U.S.
Federal Reserve in particular, I think that's going to remain
the case," ANZ analyst Daniel Hynes said.
    "We could see some support return post the meeting ... I'll
be looking for a rebound post the meeting, particularly as
they're not as hawkish as they have been," Hynes said. 
    The U.S. central bank has raised benchmark lending rates
twice this year and signalled two more increases by year end. 
    Higher U.S. rates tend to boost the dollar, making
greenback-denominated gold more expensive for holders of other
    "We do not expect any deviation in the Fed's plan ... the
precious metal remains heavily skewed towards the downside with
upside being largely limited by dollar influences," Benjamin Lu,
a commodities analyst at Singapore-based broker Phillip Futures,
said in a note. 
    Meanwhile, the Bank of England is seen raising rates when it
concludes a meeting on Thursday.             
    Spot gold is biased to fall into a range of $1,206-$1,214
per ounce, according to Reuters technicals analyst Wang Tao.
    Among other precious metals, silver        was unchanged at
$15.48 an ounce, platinum        rose 0.5 percent to $828.10 and
palladium        was 0.2 percent lower at $927.50.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Sunil Nair
and Vyas Mohan)
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