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PRECIOUS-Gold near 12-wk top as dollar slips ahead of Fed statement

Published 27/01/2016, 05:43 pm
© Reuters. PRECIOUS-Gold near 12-wk top as dollar slips ahead of Fed statement
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* Fed expected to keep rates unchanged, cite gloomy global outlook

* Dollar weaker versus currency basket, Asian stocks subdued

* SPDR Gold holdings at highest since November

* Coming Up: Federal Reserve releases statement; 1900 GMT (Updates prices)

By Manolo Serapio Jr

MANILA, Jan 27 (Reuters) - Gold beamed near a 12-week peak on Wednesday, supported by a softer dollar as investors awaited the outcome of the Federal Reserve's first policy meeting of the year.

The U.S. central bank is widely expected to keep key rates unchanged at the conclusion of its two-day meet later in the day, but investors are keen on what policymakers have to say about global economic headwinds from China to Europe.

Expectations for a rate increase at the Fed's next meeting in March are receding as growth risks rise, which should boost the price of non-interest bearing gold.

"The world's economic condition doesn't seem to give the Fed reason to hike rates soon given the growth risks," said Barnabas Gan, analyst at OCBC Bank in Singapore.

Spot gold XAU= was flat at $1,119.46 an ounce by 0630 GMT, not far below Tuesday's peak of $1,122.90, its strongest since Nov. 3.

With risk aversion intact as global growth concerns persist, "I won't be surprised if gold hits $1,150, even $1,200 in the first quarter", said Gan.

Gold's safe-haven appeal is back in vogue this year amid falling equities and oil prices, lifting spot bullion nearly 6 percent so far this month. Gold dropped 10.4 percent in 2015.

U.S. gold for February delivery GCcv1 was little changed at $1,120 per ounce.

The dollar was lower versus a basket of currencies .DXY as investors looked to the Fed's statement due out at 1900 GMT. Asian stocks held near the day's lows. MKTS/GLOB

Reflecting rising confidence in gold, holdings of SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, stood at 21.52 million ounces on Tuesday, the highest since Nov. 5. GOL/ETF

China's net gold imports for December via main conduit Hong Kong surged to the highest in more than two years, data showed on Tuesday, as investors lost faith in collapsing stock markets and a weakening currency. has taken advantage of low gold prices and an equity market rout to stock up on gold assets," said Helen Lau, analyst at Argonaut Securities.

Lau expects China's gold imports to remain strong due to a seasonal demand surge ahead of the Lunar New Year holiday in February.

Spot silver XAG= slipped 0.3 percent to $14.46 an ounce, platinum XPT= gained 0.4 percent to $877.70 and palladium XPD= was steady at $491.70.

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