Gold gains ahead of Fed meeting, euro helps

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SINGAPORE — Gold ticked higher on Tuesday as the euro rebounded although trading was cautious with investors waiting for the outcome of a Federal Reserve meeting, which could offer clues over the direction of interest rates in the world’s largest economy.

Easing expectations for the Fed to signal the need for more measures to keep interest rates low could eventually weigh on gold, which has risen around 9%, so far this year on a near-zero US rate outlook.

Gold added $3,45 to $1 702,50 an ounce, with support at the 200-day moving average of around
$1 680 an ounce. Bullion rallied to an all-time high around $1 920 an ounce last September.

“I think everybody is staying on the sidelines. On the investment side especially, people still try to keep more cash on hand. They have no intention to buy a substantial amount of gold right now,” said Dick Poon, manager of precious metals at Heraeus in Hong Kong.

“There’s not much going on, especially on the physical side,” said Poon, adding investors were also scrutinising Europe’s current efforts to solve the debt crisis.