US MIDDAY: gold soars

Gold edged up early on Tuesday as the beginning of a two-day Federal Reserve meeting had investors turning cautious, and moves were muted as buyers awaited clues on the timing of a possible US interest rate hike. Spot gold was up 0.3 percent at $1,165.90 an ounce at 3:13 pm EDT (1913 GMT), while US gold futures for December delivery settled down 0.03 percent at $1,165.80 an ounce.
Rising US interest rates would likely weigh on gold, lifting the opportunity cost of holding non-yielding bullion while boosting the dollar, in which gold is priced. "The fact is that under the light of the recent US economic data, the Fed may be paralysed and they will perhaps have no other option but to talk down the US dollar (when they make their post-meeting statement) on Wednesday," Ava Trade's chief market analyst Naeem Aslam said. If that happens, "gold will continue its path of least resistance, which for now is towards the upside," he said.
Global equity markets retreated as investors showed restraint in advance of earnings from Apple and a Fed policy statement scheduled for Wednesday at 2 pm EDT (1800 GMT). "All these markets are a bit on hold waiting for the Federal Reserve policy statement out tomorrow and the GDP number out the next day," said INTL FCStone analyst Edward Meir. "Gold is receiving some oxygen from the investor uncertainty generated by the perceived divisions at the Fed," HSBC said in a note.
Surging demand for coins and bars and a rise in buying by central banks pushed physical gold demand up 7 percent in the third quarter, though the market remained in a surplus of 51 tonnes, GFMS analysts at Thomson Reuters said in a report. China's net gold imports from main conduit Hong Kong jumped to a 10-month high in September, data showed on Tuesday. Net gold imports from Hong Kong rose to 97.242 tonnes last month, their highest since November 2014. Silver was flat at $15.83 an ounce, while platinum was down 0.9 percent at $984.25 an ounce and palladium was down 0.2 percent at $677.75 an ounce.