* Gold looks neutral in range of $1,313-$1,319 -technicals
* U.S. Fed starts two-day policy meeting on Tuesday
(Adds comment, updates prices)
By Swati Verma
BENGALURU, Sept 20 Gold rose for a second
straight session on Tuesday as equities wavered ahead of a
two-day U.S. Federal Reserve meeting in which interest rates are
mostly expected to remain unchanged.
Spot gold was up 0.2 percent at $1,315.77 an ounce by
0638 GMT, and U.S. gold futures rose 0.1 percent at
$1,319.1 an ounce.
Asian shares edged lower on Tuesday as investors nervously
awaited the outcomes of both the U.S. central bank and Bank of
Japan policy meetings this week.
A range of mixed economic figures and conflicting remarks by
key Fed policymakers have kept investors guessing over the
timing of the next U.S. rate hike.
Recent weak U.S. data has boosted bets the Fed will skip
raising rates this month, but investors will listen closely to
Chair Janet Yellen's speech on Wednesday for any hint the bank
could hike rates before the end of the year.
"Even if there is an interest rate hike in September, the
selling pressure in gold will be diluted," said Mark To, head of
research at Hong Kong's Wing Fung Financial Group, because
investors have already factored that into their risk scenarios.
Rising U.S. interest rates typically increase the
opportunity cost of holding non-yielding bullion and boost the
dollar, which makes it more expensive to buy gold for those
holding other currencies.
Spot gold looks neutral in a range of $1,313-$1,319 per
ounce, and an escape could point a direction, according to
Reuters technical analyst Wang Tao.
"Everyone is waiting for the Fed's decision tomorrow and it
is extremely hard to guess this time," said Ronald Leung, chief
dealer at Lee Cheong Gold Dealers in Hong Kong.
"However, whenever the prices are touching below $1,310,
there is strong interest to buy gold."
Japan's central bank also meets on Tuesday and Wednesday,
and could make negative interest rates the primary focus of its
monetary policy, moving away from quantitative easing.
"We suspect that the wait and hold pattern of the last few
days will continue over into tomorrow's Bank of Japan meeting
and do not expect too much in terms of price action for gold
today," said Alex Thorndike, senior precious metals dealer at
MKS PAMP Group.
Among other precious metals, spot silver rose 0.1
percent to $19.16 an ounce. The metal was up nearly 2 percent in
the previous session.
Platinum gained 0.4 percent to $1,024.85 per ounce.
Palladium rose 0.4 percent to $685.50, after rising as
much as 2 percent in the prior session.
(Reporting by Swati Verma and Nallur Sethuraman in Bengaluru;
Editing by Ed Davies and Tom Hogue)