SINGAPORE, March 16 (Reuters) - Gold edged higher on
Wednesday, recovering from its lowest in nearly two weeks
although gains were capped as investors waited for the outcome
of the Federal Reserve policy meeting.
FUNDAMENTALS
* Spot gold XAU= had risen 0.1 percent to $1,233.70 an
ounce by 0011 GMT and U.S. gold GCcv1 added 0.3 percent to
$1,234.5 an ounce. Spot gold fell to $1,225.70 in the last
session, its lowest since March 2.
* Worries about global growth and financial instability had
led investors to reprice prospects for increases in U.S. rates,
sending safe-haven gold to a 13-month high last week. But solid
U.S. data readings more recently have rekindled market
expectations of further tightening this year.
* The Fed began its two-day meeting on Tuesday and it is
likely to issue a statement at 1800 GMT.
* Fed policymakers are seen leaving short-term interest
rates unchanged but also to signal that a rate hike is not too
far off as long as the job market and inflation continue to
improve.
* Further U.S. rate rises could lift the opportunity cost of
holding non-yielding bullion.
* SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings rose 0.26 percent to
792.23 tonnes on Tuesday from 790.14 tonnes on Monday.
HLDSPDRGT=XAU
* In other news in the precious metals market, Russia plans
to hold an auction for the Sukhoi Log gold deposit before the
end of this year, Interfax news agency cited Russian Deputy
Prime Minister Alexander Khloponin as saying on Tuesday.
* The Sukhoi Log deposit, in the Irkutsk region of Siberia,
has remained one of the world's largest untapped gold deposits
for half a century and Russia has been considering selling
rights to the deposit for 20 years.
* For the top stories on metals and other news, click
TOP/MTL or GOL
MARKET NEWS
* The dollar was in a holding pattern early on Wednesday as
markets waited for fresh guidance from the Fed, while a
disappointing fall in dairy prices knocked the New Zealand
currency broadly lower. USD/
DATA/EVENTS (GMT)
1230 U.S. Consumer prices Feb
1230 U.S. Housing starts Feb
1230 U.S. Building permits Feb
1315 U.S. Industrial output Feb
1800 Federal Open Market Committee releases statement
1830 Fed Chair Janet Yellen holds news conference