* Dollar up vs euro after Fed statement, on Greece worries
* Gold weakens after Fed's cautiously optimistic view
* Platinum group down on Chinese tightening, Toyota recall
* Reuters poll shows fresh gains expected in 2010
(Recasts, adds comments, closing prices, FOMC decision,
changes dateline from LONDON)
By Frank Tang
NEW YORK, Jan 27 (Reuters) - Gold stayed lower on Wednesday
after the Federal Reserve voiced cautious optimism on the U.S.
economy, dampening the metal's appeal as an inflation hedge.
Gold and silver were pressured by the dollar, which hit a
six-month high against the euro. Platinum group metals also
sold off due to inventory liquidation and reduced hedging after
Toyota halted the manufacture of some models due to a
production problem.
In a policy statement after a two-day meeting, the Fed took
a somewhat brighter tone than it did after the previous meeting
in December, though it removed a reference to improvement in
the housing market. []
"I think those things are enough at least to keep the
markets on the defensive," said James Steel, chief commodities
analyst at HSBC in New York, referring to the Fed's views of
subdued inflation trends and high unemployment.
Steel said that a disappointing inflation outlook was not
supportive to gold, and that bullion's price reaction was not
impressive considering the market had sold off prior to the Fed
decision.
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To watch a Reuter Insider television interview on gold
prices with Peter Munk, chairman of Barrick Gold Corp, click
on: http://link.reuters.com/des85h
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Gold <XAU=> was at $1,084.05 an ounce at 3:20 p.m. EST
(2020 GMT), against $1,097.25 an ounce in New York late on
Tuesday.
U.S. February gold futures <GCG0> settled down $13.80, or
1.3 percent, at $1,084.50 an ounce on the COMEX division of the
NYMEX.
The euro fell below $1.40 for the first time since July
after the Fed announcement, partly due to worries about
Greece's fiscal health.
Meanwhile, China's credit-tightening steps and President
Barack Obama's plans to limit banks' risk taking have dampened
confidence over an economic recovery in recent weeks, helping
investors shift back to the dollar from riskier assets,
including commodities.
However, a Reuters poll of 60 analysts, traders and fund
managers were positive about gold this year as a whole, with
prices seen averaging $1,150.50 an ounce. []
Peter Munk, the chairman of the world's biggest gold miner,
Barrick Gold Corp <ABX.TO>, told Reuters Television that while
gold prices may be volatile, the rise was not over.
[]
PLATINUM FALLS ON TOYOTA NEWS
Among other precious metals, palladium fell nearly 4
percent, correcting further after last week's 19-month high of
$471.75 an ounce when investment demand fueled by the recent
launch of U.S. exchange-traded funds boosted prices.
Platinum and palladium both hit their lowest levels since
Jan. 4. Palladium <XPD=> hit a bottom of $408.50 and was last
at $410.50 an ounce, versus $425 late in New York on Tuesday.
Spot platinum <XPT=> was at $1,499 an ounce against
$1,532.50, after touching a low of $1,479.
Sentiment deteriorated after news that Toyota Motor Corp
<7203.T>, the world's biggest automaker, is to suspend U.S.
sales of eight models due to a safety recall. []
Platinum and palladium are exposed to the auto sector,
mainly used in catalytic converters.
Silver <XAG=> prices were at $16.57 an ounce versus $16.72
an ounce late on Tuesday.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCG0> 1084.50 -13.8 -1.3 1096.20 -1.1
US silver <SIH0> 16.440 -0.420 -2.5 16.845 -2.4
US platinum <PLJ0> 1492.10 -39.20 -2.6 1471.00 1.4
US palladium <PAH0> 416.75 -10.80 -2.5 408.85 1.9
Prices at 3:47 p.m. EST (2047 GMT)
Gold <XAU=> 1087.45 -9.80 -0.9 1096.35 -0.8
Silver <XAG=> 16.55 -0.17 -1.0 16.84 -1.7
Platinum <XPT=> 1500.00 -32.50 -2.1 1465.50 2.4
Palladium <XPD=> 411.50 -13.500 -3.2 405.50 1.5
Gold Fix <XAUFIX=> 1094.75 0.00 0.0 1104 -0.8
Silver Fix <XAGFIX=> 16.74 -5.00 -0.3 16.99 -1.5
Platinum Fix <XPTFIX=> 1519.00 5.00 0.3 1466 3.6
Palladium Fix<XPDFIX=> 420.00 2.00 0.5 402 4.5
(Additional reporting by Michael Taylor and Jan Harvey in
London; editing by Jim Marshall)
