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1st LD Writethru: Gold up as U.S. dollar weakens ahead of Fed statement

Xinhua, April 29, 2015 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rallied for a second straight session on Tuesday as the U.S. dollar weakened a day ahead of the Federal Reserve's statement on monetary policy, boosting the appeal of the dollar-dominated precious metal.

The most active gold contract for June delivery rose 10.7 U.S. dollars, or 0.89 percent, to settle at 1,213.90 dollars per ounce.

Analysts believe that gold's strength Tuesday is mainly driven by the U.S. dollar. The U.S. dollar index, the measure of the dollar against six major currencies, fell by another 0.7 percent of 1 p.m. U.S. Eastern Time after two days of losses, amid expectations that the Fed, in the policy announcement on Wednesday after a two-day meeting, will signal its intention to keep interest rates near zero for longer to support economic recovery.

A weaker U.S. dollar can be a positive for commodities including gold priced in dollars because it makes them cheaper for non-dollar users, while a stronger dollar can weigh on commodities.

On the economic aspect, U.S. consumer confidence fell noticeably in April, much lower than expected. The New York-based Conference Board said on Tuesday the Conference Board Consumer Confidence Index registered 95.2 in April, down from 101.4 in March.

Recent downbeat economic data saw investors scale back expectations for a rate hike by the Federal Reserve, which undercut the dollar.

Silver for May delivery gained 19.7 cents, or 1.20 percent, to close at 16.591 dollars per ounce. Platinum for July delivery added 5.2 dollars, or 0.45 percent, to close at 1,158.6 dollars per ounce. Endite