PRECIOUS-Gold eases ahead of Fed news, market wary over stimulus outlook

A. Ananthalakshmi
Tuesday, 29 Oct 2013 | 11:43 PM ET

* Gold falls for second session, below $1,350/oz

* U.S. dollar strength weighs on bullion

* Coming up: Fed statement at 1800 GMT

(Adds comments, updates prices) SINGAPORE, Oct 30 (Reuters) - Gold slipped further below five-week highs on Wednesday as investors turned jittery waiting for the end of a Federal Reserve policy meeting that may throw more light on the outlook for the U.S. central bank's bullion-friendly stimulus measures. Gold has gained about 7 percent from a three-month low hit on Oct. 15 on hopes that weak U.S. data and the repercussions of budget battles in Washington would prompt the Fed to delay the winding-down of its $85 billion monthly bond purchases. Gold prices slipped on Tuesday as traders took profits after the dollar rose to a one-week high and the trend continued on Wednesday. Spot gold was down 0.04 percent at $1,343.14 an ounce at 0318 GMT after hitting a session low of $1,339.14 earlier. "Gold has always been right up there as the commodity that is most exposed to any Fed decision to cut back on bond purchases," said Song Seng Wun, an economist at CIMB. "The (Fed) meeting will decide whether more money will be taken off the table or whether there will be a rebound." Song said any rise in gold could depend on U.S. economic data, among the key factors determining when the Fed moves to reduce its stimulus. Some analysts say expectations that the Fed will push back its "tapering" of the stimulus are already priced in, so gold may not end the year much higher than current levels. The Fed will make a statement later on Wednesday at the end of its two-day meeting. It is widely expected to say it will continue with its stimulus measures and will not reduce its asset purchases. Chinese gold prices recovered slightly on Wednesday after ending at a discount to global prices in the previous session for the first time this year. Fears of a credit tightening had prompted Chinese investors to sell bullion for cash. Indian premiums stayed near record highs due to a supply crunch.

Precious metals prices 0318 GMT

Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1343.14 -0.55 -0.04 -19.79 Spot Silver 22.45 -0.07 -0.31 -25.86 Spot Platinum 1453.74 -6.26 -0.43 -5.29 Spot Palladium 742.85 -1.15 -0.15 7.35 COMEX GOLD DEC3 1343.40 -2.10 -0.16 -19.84 8863 COMEX SILVER DEC3 22.50 0.01 +0.04 -25.76 2389 Euro/Dollar 1.3739 Dollar/Yen 98.16

COMEX gold and silver contracts show the most active months

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Alan Raybould)