* Gold to trade in tight range until Fed meet next week
-trader
* Physical markets mixed, providing little support
* Indian prices at discount, Chinese premiums edge up
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Sept 9 (Reuters) - Gold held above a three-week
low on Wednesday as the dollar nursed losses, but prices
remained range-bound as traders waited for direction from the
Federal Reserve on the timing of a U.S. interest rate hike.
Spot gold XAU= had edged up 0.1 percent to $1,122.50 an
ounce by 0237 GMT, above a three-week low of $1,116.20 reached
earlier in the week. The metal snapped a four-day losing streak
on Tuesday, buoyed by a softer dollar. USD/
With Friday's U.S. payrolls data failing to provide clarity
on the timing of the Fed's first interest rate rise in nearly a
decade, markets are now eyeing the U.S. central bank's next
policy meeting on Sept. 16-17 for clues.
"Gold looks likely to trade a relatively tight range prior
to the FOMC meeting next week," said James Gardiner, a precious
metals trader at MKS Group, referring to the Federal Open Market
Committee.
The $1,116 level is a key level of support on the downside,
while resistance is at $1,126-1,127, Gardiner said.
The prospect of higher rates, which would lift the
opportunity cost of holding non-yielding bullion while boosting
the dollar, has weighed on gold prices this year.
A decision to not raise rates at the September meeting may
support prices, said HSBC analyst James Steel.
The Fed should hold off on raising interest rates until the
global economy is more stable, the World Bank's chief economist
said in an interview with the Financial Times published on
Tuesday. ID:nL1N11E207
"The world economy is looking so troubled that if the U.S.
goes in for a very quick move in the middle of this I feel it is
going to affect countries quite badly," Kaushik Basu was quoted
as saying.
Gold has failed to attract strong investor interest as a
safe haven despite the recent weakness in stocks due to worries
over the Chinese economy, showing that the metal is struggling
to find direction outside U.S. monetary policy, analysts say.
The physical gold market has been mixed, providing little
support to global prices.
Gold prices in India are at a discount to the global
benchmark for the first time since mid July as a weak monsoon
dampened demand in the world's second-biggest consumer.
ID:nL4N11A1A0
In top consumer China, premiums edged up on the Shanghai
Gold Exchange to about $5 an ounce on Wednesday morning, up from
last week's $4.
PRICES AT 0237 GMT
Metal Last Change Pct chg
Spot gold 1122.5 1.1 0.1
Spot silver 14.765 -0.045 -0.3
Spot platinum 1003.3 0.45 0.04
Spot palladium 591.95 7.8 1.34
Comex gold 1122 1 0.09
Comex silver 14.775 0.02 0.14
Euro 1.1153
DXY 96.209
COMEX gold and silver contracts show the
most active months