PRECIOUS-Gold pares early gains; holds near 7-week low
* Spot gold signals mixed -technicals
* Coming Up: FOMC policy decision; 1815 GMT
(Updates prices) SINGAPORE, Oct 24 (Reuters) - Gold trimmed gains Wednesday after early bargain hunting tapered off and worries about the global economy resurfaced, but festive demand from top consumer India could help shore up prices. Positive Chinese manufacturing data initially lifted prices but gold was on track to decline in October for the first month in five after it failed to break the psychological level of $1,800 an ounce, prompting investors to turn to the safety of the U.S. dollar. Gold hit a high around $1,714 an ounce and was steady at $1,708.20 by 0617 GMT, not far above the previous session's low of around $1,703 which was its weakest since September 7. Prices are also well below an 11-month peak of $1,795.69 marked in early October. ``Of course, towards $1,700 you can see some support over there. I think the most important thing is the U.S. election,'' said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. ``Investors are buying a little bit. They are not that aggressive,'' said Leung, who quoted premiums for gold bars little changed at between 50 to 90 U.S. cents to spot London prices. Investors are waiting for the U.S. Federal Reserve's policy statement at the end of a two-day meeting, but most economists expect no new policy initiatives ahead of the Nov.6 presidential election, after the Fed just last month embarked on a third round of major bond purchases. The central bank's latest programme of purchasing mortgage-backed debt had given gold its latest boost, but the metal was nowhere near the record high of around $1,920 hit in September last year. U.S. gold for December was little changed at $1,709.20 an ounce.
An HSBC survey of Chinese manufacturers suggesting growth was recovering in the world's second largest economy helped trim declines in Asian shares, though investors remained wary due to weak corporate earnings worldwide and enduring worries over a global slowdown. The China HSBC Flash Manufacturing Purchasing Managers Index (PMI) rose to a three-month high of 49.1 in October, also registering the most robust order books since April, signalling a strengthening recovery. The physical sector expected buyers from top consumer India to return to the market during the festive season, during which traditional Hindu weddings also take place. ``It's a bit slow this morning, but India will still be rushing to buy ahead of Diwali. They are watching prices very closely and some still think gold is a bit bearish at the moment,'' said a physical dealer in Singapore. ``They have to buy gold. We've also seen physical inquiries from Indonesia. They have been pretty quiet recently.'' The festive season in India will peak next month with Diwali. Weddings also take place during this period, and gold jewellery is an essential part of the dowry Indian parents give to their daughters.
Precious metals prices 0617 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1708.20 0.11 +0.01 9.23 Spot Silver 31.84 0.18 +0.57 14.99 Spot Platinum 1567.75 -0.74 -0.05 12.54 Spot Palladium 593.90 2.70 +0.46 -8.98 COMEX GOLD DEC2 1709.20 -0.20 -0.01 9.09 14648 COMEX SILVER DEC2 31.88 0.08 +0.26 14.19 5221 Euro/Dollar 1.2981 Dollar/Yen 79.79