January 26, 2016 / 1:03 AM / 2 years ago

PRECIOUS-Gold near one-week high ahead of Fed meeting

MANILA, Jan 26 (Reuters) - Gold steadied near a one-week high early on Tuesday, supported by expectations that a wobbly global economy may limit the opportunity for the U.S. Federal Reserve to raise interest rates this year.

FUNDAMENTALS

* Spot gold was flat at $1,107.76 an ounce by 0035 GMT, just off an early peak of $1,108.81. The metal touched $1,109.20 on Jan. 20, a 1-1/2-week high.

* U.S. gold for February delivery rose 0.3 percent to $1,108.50 an ounce.

* The Federal Open Market Committee starts a two-day policy meeting later on Tuesday, and is widely expected to leave its federal funds rate unchanged at 0.25-0.50 percent.

* But the probability of another rate increase at the next Fed meeting in March has eased, with some analysts seeing it postponed to later in the year, amid a slowing global economy.

* That puts downward pressure on the dollar and benefits gold, which has gained more than 4 percent so far this year after declining in 2015 for a third year in a row.

* But a Reuters poll of analysts showed gold is tipped to fall for a fourth straight year in 2016, although some lost ground may be recovered next year. Bullion is forecast to average at $1,118 an ounce, the lowest annual average since 2009.

* Eldorado Gold Corp said it expects to write down the value of its assets in Greece by $1.2 billion-$1.6 billion, after the Canadian miner suspended majority of mine construction and development in the European country.

* For the top stories on metals and other news, click or

MARKET NEWS

* Asian shares look set to retreat and oil prices to resume their descent after investors used rebounds over the last two days to offload risk assets as fears of a global economic slowdown show no sign of abating.

* The dollar held close to recent trading ranges with investors cautiously awaiting the outcome of the Federal Reserve meeting.

DATA/EVENT AHEAD (GMT)

1400 U.S. Monthly home price index Nov

1400 U.S. S&P/Case-Shiller housing index Nov

1500 U.S. Consumer confidence Jan

Federal Open Market Committee starts two-day policy meeting (Reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)

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