PRECIOUS-Gold dips for 3rd session, Fed stimulus decision in focus
SINGAPORE, Sept 18 (Reuters) - Gold extended losses into a third session on Wednesday, falling about 1 percent to trade below $1,300 an ounce, with investors expecting the U.S. Federal Reserve to announce a reduction in its bullion-friendly stimulus measures.
* Spot gold had fallen 0.9 percent to $1,297.76 an ounce by 0028 GMT. It earlier dropped to $1,295.24 - its lowest since August 8.
* The Fed is expected to begin its long retreat from ultra-easy monetary policy on Wednesday by announcing a small reduction in its bond buying, while stressing that interest rates will remain near zero for a long time to come.
* Most economists expect the U.S. central bank to announce a $10 billion reduction in its $85 billion monthly asset purchase programme.
* U.S. consumer prices barely rose in August, but rising rents and medical care costs pointed to some stability in underlying inflation that could make the Fed more comfortable trimming its bond purchases. Gold is often regarded as a hedge against inflation.
* Goldman Sachs said it remained neutral on gold prices until the end of this year, citing a recent string of slightly disappointing U.S. economic data and expectations of a "dovish" tapering by Fed.
* Top gold consumer India increased its import duty on gold jewellery to 15 percent from 10 percent, setting it higher than the duty on raw gold in a move to protect the domestic jewellery industry.
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* The U.S. dollar held near a four-week trough against a basket of major currencies in early Asian trade.
DATA/EVENTS (GMT) 1230 U.S. building permits 1230 U.S. housing starts 1800 Federal Open Market Committee ends policy meeting 1830 Fed Chairman Ben Bernanke holds news briefing
Precious metals prices 0028 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1297.76 -11.28 -0.86 -22.50 Spot Silver 21.61 -0.07 -0.32 -28.63 Spot Platinum 1411.74 -6.06 -0.43 -8.03 Spot Palladium 696.47 -7.03 -1.00 0.65 COMEX GOLD DEC3 1297.90 -11.50 -0.88 -22.55 10962 COMEX SILVER DEC3 21.65 -0.13 -0.62 -28.56 1321 Euro/Dollar 1.3353 Dollar/Yen 99.14
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)