* Traders cautious ahead of Fed policy meeting
* Stock markets retreat as risk appetite wilts
* Chinese imports from Hong Kong surge in September (Updates prices, adds comment)
By Jan Harvey
LONDON, Oct 27 (Reuters) - Gold edged up on Tuesday as caution ahead of a two-day Federal Reserve meeting weighed on risk appetite, but moves were muted as buyers awaited clues on the timing of a possible U.S. interest rate hike.
Spot gold XAU= was up 0.4 percent at $1,167.20 an ounce at 1450 GMT, while U.S. gold futures GCv1 for December delivery were up $1 an ounce at $1,167.20.
Prices hit their highest since June earlier this month after a run of downbeat U.S. data pushed back expectations for a rate hike, but they have retreated from that level as investors await more clarity on the timing of an increase.
Rising U.S. interest rates would likely weigh on gold, as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
"The fact is that under the light of the recent U.S. economic data, the Fed may be paralysed and they will perhaps have no other option but to talk down the U.S. 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.
The dollar index .DXY dipped into negative territory on Tuesday as a private gauge of U.S. consumer confidence unexpectedly fell in October, while world stocks fell as investors locked in gains from the past month before the Fed meeting. FRX/ MKTS/GLOB
"Gold is receiving some oxygen from the investor uncertainty generated by the perceived divisions at the Fed," HSBC said in a note. "The longer the uncertainty goes on, the more investors may turn to gold."
In an industry report on Tuesday, GFMS analysts at Thomson Reuters said gold is set to remain under pressure until there is more clarity on U.S. rates. urn:newsml:reuters.com:*:nL8N12Q31G
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, the report showed, though the market remained in a surplus of 51 tonnes.
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. urn:newsml:reuters.com:*:nL3N12R2RQ
Silver XAG= was up 0.6 percent at $15.90 an ounce, while platinum XPT= was down 0.5 percent at $987.49 an ounce, and palladium XPD= was little changed at $678.50 an ounce.