* Gold down but trades above Tuesday's six-week low
* Federal Reserve eyed for influence on dollar trade
By Miho Yoshikawa
TOKYO, June 24 (Reuters) - Gold inched down towards $920 on
Wednesday but remained above the previous session's six-week low
as traders awaited the outcome of a key Federal Reserve meeting
on interest rates.
The precious metal bounced back from the six-week low of
$912.90 as the dollar, the main driver of the current market, was
hit by concerns that the Fed would reduce expectations of higher
interest rates when it concludes its meeting on Wednesday.
Bullion, which has been sliding since failing to top $1,000
this month, is expected to trade within a narrow range on
Wednesday ahead of the conclusion of the Fed's meeting.
Traders said speculators clearing long positions and receding
worries about inflation have pressured the precious metal since
it touched a three-month high of $989.80 in early June.
"The gold market's waiting for material to trade on," said
Koji Suzuki, a senior analyst at SBI Futures Co Ltd.
Gold <XAU=> was at $923.20 an ounce at 0240 GMT, down 0.2
percent from the notional close in New York of $925.15.
"The fundamentals are unchanged, which is that gold's fate is
linked with that of the U.S. dollar," Suzuki said.
Higher rates boost the dollar, thus pressuring gold, which is
often viewed as an alternative investment to the U.S. currency.
Dollar-denominated gold prices also tend to rise when the
U.S. currency falls, because it gains value in overseas markets.
U.S. gold futures for August delivery <GCQ9> were at $924.10
an ounce, down 0.02 percent from Tuesday's settlement.
Investor interest in gold-backed exchange-traded funds, which
are designed to closely reflect the price of an underlying market
such as gold, has lessened recently.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings were 1,131.24 tonnes on
June 23, unchanged from the previous business day. []
That marks a 0.2 percent decline from the record high of
1,134.03 tonnes reported on June 1.
The dollar hovered at its lowest levels for a week against
the euro on Wednesday after tumbling sharply across the board as
the market readied for the Fed to dampen expectations of higher
interest rates. []
PRICES
Precious metals prices at 0238 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 923.20 -1.95 -0.21 4.89
Spot Silver 13.85 0.03 +0.22 22.35
Spot Platinum 1157.50 -0.50 -0.04 24.20
Spot Palladium 233.50 0.00 +0.00 26.56
TOCOM Gold 2840.00 31.00 +1.10 10.38 24293
TOCOM Platinum 3574.00 12.00 +0.34 34.77 7828
TOCOM Silver 425.20 9.50 +2.29 33.17 350
TOCOM Palladium 722.00 1.00 +0.14 31.27 375
Euro/Dollar 1.4075
Dollar/Yen 95.38
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Miho Yoshikawa;)
