PRECIOUS-Gold hovers near 1-week low as dollar steadies ahead of Fed decision

Shafaq News/ Gold prices were flat on Tuesday, after touching their lowest levels in more than one week, as the dollar held firm ahead of the U.S. Federal Reserve's policy meeting, where the central bank is likely to deliver another oversized interest rate hike.

FUNDAMENTALS

* Spot gold XAU= was listless at $1,633.69 per ounce, as of 0059 GMT, having earlier touched its lowest level since Oct. 21.

* U.S. gold futures GCv1 fell 0.3% to $1,636.30.

* The dollar index =USD was steady after rising 0.8% overnight, hurting gold's appeal for overseas buyers.

* U.S. central bankers are expected to keep their inflation fight in high gear this week, even as they intensify a debate over when to downshift to smaller interest rate hikes so as to avoid sending the world's biggest economy into a tailspin.

* The U.S. Fed is likely to raise rates by 75 basis points for a fourth straight time, bringing the target overnight lending rate to a 3.75%-4% range.

* Gold is highly sensitive to rising U.S. interest rates, as that increase the opportunity cost of holding the non-yielding metal.

* Euro zone inflation surged more than expected in October, data showed on Monday, fuelling expectations that the European Central Bank will press on with big interest rate hikes despite economic growth slowing.

* Holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell 0.22% to 920.57 tonnes on Monday from 922.59 tonnes on Friday.

* Spot silver XAG= rose 0.2% to $19.18 per ounce, platinum XPT= dipped 0.1% to $924.51 and palladium XPD= gained 0.9% to $1,856.91.

Source: Reuters