Gold off three-week low in Asian markets

Gold shrugged off a weaker dollar to hold steady in Asia on Wednesday ahead of an expected interest rate rise by the US Federal Reserve later in the day. Spot gold was at $421.65/422.15 an ounce, little changed from $420.80/421.60 late in New York. The metal fell to a three-week low at $419.20 an ounce on Tuesday as investors took profit from safe-haven purchases ahead of Iraq's election at the weekend.
Gold was expected to trade in a $420 to $425 range ahead of the Fed.'s decision. Some dealers said India, the world's largest gold consumer, was chasing gold at lower levels, boosting demand for gold bars in Singapore Demand for gold jewellery picks up in India during the wedding season, which is ongoing.
"I think refineries are all fully booked until March," said Beth Hsia Wah, a dealer at United Overseas Bank in Singapore, a centre for bullion trading in Southeast Asia. In other precious metals, platinum eased from a two-month high at $882 hit on Tuesday because of technical-based selling in Tokyo's platinum futures.
Spot platinum was trading at $873/878 an ounce, versus $873.50/878.50 in late New York trade. Sister metal palladium was at $189/194, versus $187.50/192.50. Dealers said recent gains in Tokyo platinum futures and the spot markets were driven by technical and speculative buying and not by purchases from jewellers or automakers.
"People are disappointed after the overseas markets did not follow up yesterday's strong gains. That's why we see a little bit of selling in TOCOM today," said one dealer in Tokyo.
"The market has been extremely quiet in the past few week.
We are not seeing any particular buying in China ahead of the Lunar New Year," said the dealer. China is the world's largest market for platinum jewellery. The Lunar New Year begins on February 9.
Dealers expected platinum to trade in a tight $870 to $877 ranges while waiting for fresh direction from the dollar. The euro was trading at $1.3092 from $1.3046 in late US trade.
A weaker dollar tends to make dollar-priced precious metals more attractive for holders of other currencies.
Markets widely expect the Fed to announce a quarter-point rate increase on Wednesday. Traders await clues on the central bank's outlook for rates. The Fed has described its policy as measured, having raised rates by 25 basis points each at its last five meetings.