* Fed says closely monitoring global economy
* Asian stocks slightly higher, oil drops again
* Coming Up: U.S. durable goods orders; 1330 GMT
(Updates prices)
By Manolo Serapio Jr
MANILA, Jan 28 (Reuters) - Gold edged down from 12-week
highs on Thursday after the U.S. Federal Reserve acknowledged a
challenging global economy but signalled it was unlikely to be
deterred from raising interest rates this year.
The less dovish tone of the Fed's statement helped boost the
dollar against a basket of currencies .DXY and weighed on
gold, which had gained on global uncertainties from China to
Europe.
Spot gold XAU= was down 0.7 percent at $1,117.64 an ounce
by 0635 GMT. It peaked at $1,127.80 on Wednesday, its highest
since Nov. 3.
U.S. gold for February delivery GCcv1 was up 0.2 percent
at $1,118 per ounce, off a session high of $1,125.70.
After keeping U.S. interest rates unchanged as expected, Fed
policymakers said the economy was still on track for moderate
growth and a stronger labour market even with "gradual" rate
increases, suggesting its concern about global events had
diminished but not squashed chances of a rate hike in March.
Investors were also taking profits on gold after its recent
run-up, said Daniel Ang, investment analyst at Phillip Futures
in Singapore.
"I think the safe-haven appeal of gold is tapering off a bit
and investors are looking at other havens such as the Japanese
yen," Ang added.
Prior to the Fed's first policy meeting for the year,
expectations for a U.S. rate hike in March had receded amid the
global economic headwinds.
But traders believe the Fed will still take the slow route
to raising rates, boding well for gold.
"Although the Fed's comments were not as dovish as hoped,
the continued expectation that future interest rate rises will
be slow and gradual will support the metal," MKS Group trader
James Gardiner wrote to clients.
A mild recovery in Asian stocks also dented gold's appeal as
investors slowly returned to battered equities. MKTS/GLOB
Other precious metals were similarly under pressure. Spot
silver XAG= slipped 0.6 percent to $14.39 and platinum XPT=
was down 0.7 percent at $873.65. Palladium XPD= was steady at
$497.