Expert Analysis for Gold and Silver Futures Trading

Gold turned over 1 percent lower on Wednesday as a stronger dollar dampened the metal's status as a hedge against the falling U. S. currency, even though the U. S. Federal Reserve said it would keep key interest rates at record lows. Silver too followed the fall in gold, paring 1.39 percent from its previous close on COMEX.

IN FOCUS:

The Federal Reserve Open Market Committee (FOMC) upgraded its assessment of the U. S. economy, saying activity had picked up after a severe downturn. The U. S. central bank kept key U. S. interest rates unchanged, and said it would keep rates low for an extended period.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,101.735 tonnes as of Sept 23, unchanged from the previous business day.

Peru gold miner Minera IRL Ltd said on Wednesday it has signed a deal to acquire control of the La Falda porphyry in the Maricunga gold belt of northern Chile, where it plans to begin drilling by the close of 2009.

India gold traders continued to trickle in on Wednesday as the rupee strengthened, making the dollar-quoted asset cheaper, to build up stocks in the middle of the festival season, dealers said.

The precious metals initially received a boost as the dollar fell to a one-year low against the euro. However, the dollar turned higher amid a weakening equities market.

India's gold purchases have picked up as the festive season gained steam in the world's largest consumer of bullion."India continues to buy but I guess other consumers are quite cautious this time around. I don't think people dare to cash in right now especially after the market has bounced back from below $1000," said a dealer in Singapore.

FUNDAMENTAL OUTLOOK:

Gold is expectedto trade sideways to downtoday. The risk aversion in the markets andthe expected weakness in jobless claims numbers to be reported later in the day may provide some strengthtothe dollar thereby pressurizing prices of precious metals.