Gold was flat on Tuesday, barely budged from the prior session's two-week low, with trading lacklustre as Federal Reserve policy makers headed into a two-day meeting that financial markets will watch for clues on the outlook for US monetary tightening. Trading volume was "slightly softer, which is generally to be expected ahead of the Fed," said Suki Cooper, precious metals analyst at Standard Chartered Bank in New York.
The dollar dipped slightly against a basket of currencies ahead of the Fed meeting. Analysts expect the Fed to issue a statement on Wednesday announcing that it will reduce bond purchases while leaving the door open to a US interest rate hike in December. "The dollar fell and then rose and that was basically a mirror image of today's gold market," said Bart Melek, head of commodity strategy at TD Securities in Toronto.
Spot gold was up 0.21 percent at $1,309.32 per ounce by 2:14 pm EDT (1814 GMT), off the previous day's low of $1,304.10. The most active US gold futures for December delivery settled down $0.2, or 0.02 percent, at $1,310.6 per ounce. "My concern at the moment is that this gold rally has been led by short term tactical investors," Cooper said. Josh Graves, senior market strategist at RJO Futures in Chicago, noted that hedge funds and money managers have built a hefty net long position in gold.
Among other precious metals, silver was up 0.35 pct at $17.27 an ounce, while platinum fell 0.74 pct at $952.4 an ounce. Palladium was down 2.86 pct at $908.73 an ounce was down 2.1 percent at $916.14. Its session low of $908.97 an ounce was its lowest in a month.
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