Gold gained on bargain hunting on Tuesday after falling around 2 percent in New York, but investors may be careful about taking large positions ahead of an interest rate decision by the US Federal Reserve. The Fed is expected to leave rates unchanged at 2 percent on Wednesday and investors will focus on the accompanying statement for clues on the future course of US monetary policy.
Gold rose to $886.30/887.30 an ounce from $882.85/884.05 in the US market late on Monday, when it dropped to its lowest level in nearly a week at $877 after a sudden rise in the dollar triggered selling. Rumours that a hedge fund liquidated around 2 million ounces of gold also contributed to the losses, according to some dealers.
Spot platinum rose to $2,035.50/2,055.50 an ounce from $2,033.50/2,053.50 late in New York. Spot palladium firmed to $466.50/474.50 an ounce from $464.00/472.00. Silver edged up to $16.81/16.87 an ounce from $16.72/16.80 late in New York but was below a 3-week high of $17.71 an ounce hit last week. The most active Tokyo platinum contract for April 2009 delivery on the Tokyo Commodity Exchange fell 30 yen per gram to 6,961 yen.