* Gold cuts losses but remain 1 pct lower after FOMC
* Touches session lows, rebound as dollar vacillates
* Fed said it commits to buy $600 bln more in Treasuries
* Coming up: U.S. October nonfarm payrolls report due Fri.
(Recasts, updates with details from FOMC statement, closing
market prices)
By Frank Tang
NEW YORK, Nov 3 (Reuters) - Gold prices partly pared losses
on Wednesday after the Federal Reserve walked a careful line in
launching its second round of quantitative easing, pledging to
buy $600 billion over eight months to boost the economy.
With a Treasury buying program that was slightly larger
than expected in total but spread over a longer time frame, the
Fed's long-anticipated announcement of a fresh cash infusion
was expected to aid gold over the medium term, but did little
to sway commodity prices or the dollar on the day.
The Fed also left the door open to adjusting its scheme
down the road, saying it would regularly review the pace and
size of the program and adjust it as needed depending on the
path of the recovery. []
Prices had come under pressure from a firmer dollar, with
COMEX gold futures falling as much as 2 percent, while silver
futures fell more than 3 percent in earlier trade.
Gold initially cut losses in a knee-jerk reaction after the
FOMC statement, but prices remained 1 percent lower.
"Short term we have a sell-off. After the sell-off you have
to move back into gold and precious metals and buy back those
precious metals and commodities you may have sold going into
this meeting," said Michael Pento, senior economist with Euro
Pacific Capital in New York.
He added: "This is going to lead us to the very high
likelihood of an inflationary death spiral."
By 3:39 p.m. EDT (1939 GMT), spot gold <XAU=> was down 1.1
percent or $15 to $1,341.99 an ounce, off an earlier low of
about $1,324.
U.S. gold futures for December delivery <GCZ0> were down
$11.90 at $1,345 an ounce. December settled down $19.30 at
$1,337.60 prior to the FOMC.
"Gold has come off because a lot of expectations were
already built in. The market was so overbought that it had
become a momentum play, it really needs a good dip to give a
good buying opportunity," Ashok Shah, chief investment officer
at London and Capital Fund.
Silver <XAG=> fell 0.1 percent to $24.79 an ounce, having
hit a low of $23.93 in earlier trade.
"Although the committee anticipates a gradual return to
higher levels of resource utilization in a context of price
stability, progress toward its objectives has been
disappointingly slow," the Fed said.
The overall size of the program was slightly larger than
the $500 billion that many analysts had looked for, however the
pace of monthly buying fell short of expectations for something
on the order of $100 billion.
Prices at 3:21 p.m. EDT (1921 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1337.60 -19.30 -1.4% 22.0%
US silver <SIZ0> 24.436 -0.400 0.0% 45.1%
US platinum <PLF1> 1697.20 -21.90 -1.3% 15.4%
US palladium <PAZ0> 642.70 -2.75 -0.4% 57.2%
Gold <XAU=> 1341.90 -15.10 -1.1% 22.4%
Silver <XAG=> 24.66 -0.25 -1.0% 46.4%
Platinum <XPT=> 1696.49 -12.01 -0.7% 15.8%
Palladium <XPD=> 641.97 -1.03 -0.2% 58.3%
Gold Fix <XAUFIX=> 1345.50 -13.00 -1.0% 21.9%
Silver Fix <XAGFIX=> 25.00 27.00 1.1% 47.1%
Platinum Fix <XPTFIX=> 1709.00 4.00 0.2% 16.6%
Palladium Fix <XPDFIX=> 638.00 3.00 0.5% 58.7%
(Additional reporting by Barani Krishnan and John Parry in New
York, Jan Harvey in London; Editing by Walter Bagley)
