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Gold softens on caution ahead Fed’s policy decision

Gold prices started November lower on Wednesday as cautious investors awaited U.S. Federal Reserve’s policy decision, after the Middle-East worries led to a strong safe-haven rally last month and pushed prices above $2,000.

FUNDAMENTALS

* Spot gold fell 0.2% to $1,979.71 per ounce by 0125 GMT and U.S. gold futures dropped 0.3% to $1,988.70.

* Spot gold posted a 7.3% jump in October after prices accelerated over the $2,000 threshold last week from their lowest in seven months at $1,809.50 on Oct. 6, a day before Hamas’ attack on Israel.

* Israeli bombings killed at least 50 Palestinians on Tuesday including a Hamas commander in a densely packed refugee camp in Gaza, as medics battled to treat the injured.

* Market focus is on the outcome of the Fed’s two-day monetary policy meeting concluding later in the day, followed by the U.S. monthly jobs report on Friday.

* U.S. labor costs increased solidly in the third quarter amid strong wage growth, while house price inflation accelerated in August.
* U.S. consumer confidence declined for a third straight month in October, a survey showed on Tuesday.
* Inflation in the euro zone is falling fast and the economy has begun contracting, data showed.

* Gold prices near record highs could dampen demand in India during the peak festival season and lead to the lowest purchase volumes in three years, the World Gold Council (WGC) said on Tuesday.

* Spot silver dropped 0.8% to $22.71 per ounce, platinum slipped 0.5% to $929.46 and palladium rose 0.6% to $1,122.09.

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