* Gold in tight range until Fed meet next week - analyst
* Physical markets mixed, providing little support
* GRAPHIC: Commodity returns http://link.reuters.com/reb25t
(Updates prices, adds comment)
By Jan Harvey
LONDON, Sept 9 (Reuters) - Gold fell to a three-week low on
Wednesday as stock markets strengthened and the dollar firmed,
though prices remained hemmed into a narrow range ahead of next
week's Federal Reserve meeting.
The gold market will be closely watching the U.S. central
bank's next policy statement on Sept. 17 for clues on the timing
of a U.S. interest rate rise.
Gold has benefited in recent years from ultra-low rates,
which cut the opportunity cost of holding bullion while holding
the dollar in check. Expectations rates will rise soon have
helped push the metal down 5 percent this year.
Spot gold XAU= was down 1 percent at $1,110.11 an ounce at
1405 GMT, while U.S. gold futures GCv1 for December delivery
were down $11.50 at $1,109.50.
"The dollar's back up again today, which is underpinning the
fall, and there is possibly somre pressure from the resurgent
equity market," Mitsubishi analyst Jonathan Butler said.
"We have another week to go before the Fed, and I think a
September rate hike has been all but ruled out. The situation is
just too uncertain."
Global shares surged on Wednesday, led by the biggest daily
gains in Japan for seven years, helping to lift the dollar and
oil prices as the prospect of more stimulus from China soothed
investors rattled by recent market turmoil. MKTS/GLOB
Gold has failed to attract strong investor interest as a
safe haven, despite the recent weakness in stocks because of
worries over the Chinese economy, showing that the metal is
struggling to find direction outside U.S. monetary policy,
analysts say.
"In the run-up to the Fed's meeting next week, market
participants are likely to be exercising restraint, so we are
unlikely to see any pronounced price fluctuations," Commerzbank (XETRA:CBKG)
said in a note.
The physical gold market has also 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 higher on the Shanghai
Gold Exchange to about $5 an ounce on Wednesday morning from
last week's $4.
Among other precious metals, silver XAG= was down 1
percent at $14.67 an ounce, while platinum XPT= dropped by 2
percent to $982.99 and palladium XPD= fell 1.1 percent to
$577.97.