* Dollar retreats ahead of Fed verdict on monetary easing
* Platinum, palladium traders digest lacklustre auto sales
* Coming up: FOMC statement on rates, policy, 1815 GMT
(Updates prices)
By Jan Harvey
LONDON, Nov 3 (Reuters) - Gold prices softened in Europe on
Wednesday as the dollar steadied against a currency basket, but
traders were nervous of adding substantially to positions ahead
of an announcement on monetary policy from the Federal Reserve.
Spot gold <XAU=> was bid at $1,355.30 an ounce at 1243 GMT,
against $1,357.00 late in New York on Tuesday. U.S. gold futures
for December delivery <GCZ0> eased $1.10 an ounce to $1,355.80.
A Reuters poll found on Wednesday that most leading
economists expect the Fed to buy between $80 billion and $100
billion worth of assets per month under a new programme to
bolster the struggling economy. []
Estimates for how long the Fed will print money and how much
it will spend overall varied from $250 billion to $2 trillion.
Macquarie analyst Hayden Atkins said the initial euphoria
over QE and its potential impact on gold had largely worn off,
and that while the metal may see some support if the policy
meets expectations, a major lift is unlikely.
"There may be some upside surprise but (markets) pretty
quickly priced out a Big Bang policy," he added. "It might be a
mild positive, but I think the reality of what could happen is
in most people's minds already."
"It is good to actually get this out of the way, so we can
start to focus on other global events that mean more to
different markets," he added.
"There has been a lot of talk about what has to happen with
exchange rates globally, but that has probably been ignored
because of the big moves in currency markets on QE expectations.
Maybe we will start to focus more broadly now, and that will
drive the market going forward."
The dollar, typically a key driver of gold prices, steadied
against a basket of currencies on Wednesday ahead of expected
fresh Fed stimulus, which analysts say could weigh on U.S.
yields and ultimately put more pressure on the unit. []
A weaker dollar typically boosts gold, as it increases the
metal's appeal as an alternative asset.
DHANTERAS SHINES
Wholesale physical gold demand in the world's biggest
bullion consumer India was healthy as the country's busiest
gold-buying festival, Dhanteras, got under way. Local demand was
helped by the strong rupee, dealers said. []
"Traditionally, seasonal demand peaks at this point," said
VTB Capital analyst Andrey Kryuchenkov in a note.
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, slipped on Tuesday,
however, by around 1 tonne to 1,292.189 tonnes. ETFs issue
securities backed by physical stocks of metal. []
On the supply side of the market, the Xinhua news agency
reported that China had found a 100-tonne gold deposit in Inner
Mongolia, worth about $5.25 billion. China is the world's
biggest gold miner, and its number two consumer. []
Silver <XAG=> was at $24.86 an ounce against $24.91.
Holdings of the world's number one silver ETF, the iShares
Silver Trust <SLV> eased further from the record high they hit
last month on Tuesday. []
Platinum <XPT=> was at $1,711.24 an ounce against $1,708.50,
while palladium <XPD=> was at $642.25 against $643. As platinum
group metals are largely used in autocatalyst manufacturing,
traders are digesting October car sales figures.
Toyota Motor Corp <7203.T>, the world's biggest carmaker,
said on Tuesday its sales in China fell 6 percent in October,
the first year-on-year decline in 18 months. []
French and Spanish car sales plunged in October as Spain
completed a scrappage scheme and France's reduced subsidy was
not enough to prevent a drop. []
(Editing by William Hardy)
