Bullion Update, Precious Metals Trading and Market Outlook: Nirmal Bang

Bullion Update, Precious Metals Trading and Market Outlook: Nirmal Bang     Gold climbed more than 1 percent on Tuesday to trade within striking distance of recent 18-month highs, as a tumbling dollar stirred investment buying ahead of an interest-rate decision by the U. S. Federal Reserve. Silver outperformed gold, gaining 1.38 percent on Comex.

India's gold imports in 2009 may fall to their lowest level since trade was liberalised 12 years ago as high prices have put off buyers in the world's biggest market for the metal, a top importer said on Tuesday. Total imports may fall to 500 to 550 tonnes, one of India's top three gold importers told.

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 22, unchanged from the previous day.

The euro rose above $1.48 for the first time in a year, and the dollar index fell nearly 1 percent against other major currencies as dealers took advantage of deteriorating sentiment toward the dollar.

Noncommercial net long positions in gold futures in New York at an all-time high of 235,647 lots for the week ended Sept.
15 worried investors as it could spark a long liquidation.

A hedge fund run by RAB Capital that invests in gold has fallen about 17.5 percent since the start of June, the group said, missing a large rise in the gold price because of bad bets. The $35 million RAB Gold fund made the losses between June and August.

Dekel Golan is bullish about the future -- not only are gold prices soaring, but the CEO of Chaarat Gold Holdings Ltd secured funding from China to move the company's mining project in Kyrgyzstan closer to production.

The focus for the day would be on the outcome of FOMC meeting today. We expect precious metals to surge ahead in today's session on weaker dollar.