PRECIOUS-Gold extends losses as Fed stimulus decision looms
* Gold down for 3rd session, falls over 1 pct
* Next support only near $1,270-$1,280 -traders
* Coming up: Fed Chairman news briefing at 1830 GMT
(Updates prices) SINGAPORE, Sept 18 (Reuters) - Gold extended losses into a third session on Wednesday, falling over 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. The Fed is expected to begin its long retreat from ultra-easy monetary policy by announcing a small reduction to its $85 billion monthly bond purchases following a two-day policy meeting that ends on Wednesday. Many expect a $10 billion cut. Spot gold had fallen 0.5 percent to $1,302.50 an ounce by 0623 GMT, bringing losses so far this year to 22 percent. It had earlier dropped to $1,291.34 - its lowest since August 8. "Its all dependent now on the FOMC," said a precious metals trader in Hong Kong, referring to the Federal Open Market Committee. "It depends on what the language is going to be on their stimulus and what sort of tapering they pursue." "Gold is still technically under pressure and will probably struggle to go above $1,350 again." Traders said prices would find their next support level at $1,270-$1,280 an ounce. Gold, often seen as a hedge against inflation and a slowing economy, benefited when central banks around the world launched stimulus measures to support their economies. The metal hit an all-time high of about $1,920 an ounce in 2011. But this year several analysts have cut their forecasts for gold prices in anticipation of the U.S. central bank curbing its stimulus. Goldman Sachs expects prices to drop to $1,050 by the end of next year.
PHYSICAL DEMAND Due to the volatility in prices, physical demand has failed to pick up rapidly in key consumers India and China. Expectations that prices could fall further once the Fed announces a cut in stimulus have also restrained purchases. Shanghai gold futures fell 1 percent on Wednesday. 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. The Indian central bank and finance ministry have taken several steps this year to curb bullion imports in an effort to reduce the country's record trade deficit. Silver and palladium dropped about 1.6 percent, while platinum fell nearly 1 percent.
Precious metals prices 0623 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1302.50 -6.54 -0.50 -22.22 Spot Silver 21.57 -0.11 -0.51 -28.76 Spot Platinum 1416.00 -1.80 -0.13 -7.75 Spot Palladium 698.50 -5.00 -0.71 0.94 COMEX GOLD DEC3 1302.50 -6.90 -0.53 -22.28 41886 COMEX SILVER DEC3 21.61 -0.17 -0.80 -28.69 11182 Euro/Dollar 1.3361 Dollar/Yen 99.24
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)