Gold futures gain as much as $10 ahead of Fed

SAN FRANCISCO (MarketWatch) — Gold futures gained as much as $10 an ounce Wednesday as investors looked ahead to the Federal Reserve’s monetary-policy decision and Fed Chairman Ben Bernanke’s press conference due later in the trading day for clues on inflation.

“A weakening dollar and rising inflationary concerns have supported the recent rally in gold,” analysts at ICICI Bank said in a morning note to clients. “Investors are likely to look for further cues from [the] U.S. Fed meeting that concludes later today.”

Gold for June delivery (COMMODITIES:GCM11)  touched a high of $1,513.60 an ounce on the Comex division of the New York Mercantile Exchange, though it’s pulled back slightly to $1,512.40, up $8.90.
On Tuesday, prices closed lower for the first time in nine sessions.
The Federal Open Market Committee is scheduled to announce its rate decision at 12:30 p.m. Eastern time. It’s expected to stick to its target federal funds rate of between 0% and 0.25% and its goal of buying $600 billion in Treasury securities by the end of June. Read more about what’s expected from the Fed meeting

For the metals market, overall sentiment is “subdued” as traders await the Fed statement, “which will likely determine mid-term direction given recent dollar-related movements,” analysts at TheBullionDesk.com said in a report issued Wednesday.
At last check, the dollar index (BOARD:DXY) , which measures the U.S. currency against a basket of six rivals, traded at 73.717, down from 73.789 in late North American trading Tuesday. Read the currencies story.
In the short term, both gold and silver are “vulnerable to corrections given the scale of long exposure, particularly if the Fed signals an imminent start of monetary tightening,” they said.
But “we think the Fed is more likely to maintain its current stance,” they said. “And given the broader issues of inflation, heightened Eurozone debt issues and MENA [Middle East North Africa] unrest, we expect dip-buying to underpin precious metals and maintain the current uptrend.”
Silver for May delivery (COMMODITIES:SIK11)  was up 72 cents at $45.77 an ounce. The contract had closed lower on Tuesday to end an eight-session winning streak.
June palladium (NEW:PAM11)  was also up 65 cents at $756.35 an ounce and July platinum (NEW:PLN11)  tacked on $8 to $1,813.40 an ounce, but May copper (COMMODITIES:HGK11)  fell 4.95 cents to $4.27 a pound