Gold off three-week low in Asian markets

Gold gyrated ahead of Tuesday's Federal Open Market Committee meeting, which will offer hints as to the dollar's outlook and determine the metal's next direction.
"I think the market will remain a little bit choppy ahead of that and probably find direction thereafter, given all the speculation that has been in the market in recent times about what the Fed is going to do next," said Darren Heathcote of Invested Australia in Sydney.
Spot gold rose as high as $630.30 an ounce, hit a low of $628.30 and was at $628.40/629.90 an ounce, down from $629.20/630.70 late in New York. Gold dropped to a three-week low of $622.60 on Monday, just above a key support of $620 an ounce, due to a firm dollar.
But it briefly regained $630 after physical buyers reappeared and the dollar reversed gains. "I think it's relative comforting for investors," said Heathcote, referring to gold's rebound. "However, whilst we remain below the $630s, it still has potential to weaken further, in my view," he said. The US dollar extended losses against the euro after former Federal Reserve Chairman Alan Greenspan warned investors to expect a few more years of dollar weakness.
The euro rose to $1.3245 from around $1.3235 in late US trade. The dollar slipped to 116.85 yen from 117.00 yen. With the Fed widely expected to leave rates unchanged at 5.25 percent at a policy meeting later in the day, investors will scrutinise the post-meeting statement to see how worried the central bank is about inflation risks.
"I think when the statement comes out, we are going to see a more bullish gold that anything else. There's still a small probability the Fed is going to reduce going forward," said a dealer in Singapore. "But I guess the trading range will be the same at $620 to $690 until the end of the year," he said. Benchmark gold futures on the Tokyo Commodity Exchange, currently October 2007, gained 14 yen per gram to 2,388 yen ($20.47) after rises in New York's Comex market.
Platinum rose to $1,113/1,118 an ounce from $1,110/1,115 an ounce late in New York. Silver was unchanged at $13.79/13.84 an ounce. Palladium eased to $328/333 an ounce from $329/334.