Gold returns to near record high as dollar drops

SINGAPORE (Reuters) - Gold rose to its strongest in nearly two weeks on Tuesday, hovering within sight of last month's record, as the U.S. dollar dropped on data showing further evidence of an economic recovery.

But trading was expected to be light, with Japanese speculators away for a holiday.

FUNDAMENTALS

* Spot gold was quoted at $1,063.60 an ounce at 0042 GMT, up $4.45 from New York's notional close -- not far from a lifetime high of $1,070.40 struck on Oct. 14.

* U.S. gold futures for December delivery added $10.2 an ounce at $1,064.200 on the COMEX division of the New York Mercantile Exchange, within sight of last month's record of $1,072 an ounce.

* The International Monetary Fund said on Monday it sold 200 tonnes of gold to the Reserve Bank of India for a total of $6.7 billion as part of the global institution's plans to increase its lending resources.

* AngloGold Ashanti lowered its annual production target for the second straight quarter after suspending output at a South African mine for safety checks.

* In an interview with Reuters at the London Bullion Market Association conference, Anglo said it may accelerate closing its hedgebook if conditions are right.

* The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,103.519 tonnes as of Nov 2, unchanged from the previous business day.

MARKET NEWS

* The U.S. dollar and the yen edged down on Tuesday, while the Australian dollar extended gains ahead of a central bank meeting where interest rates are widely expected to be lifted by a quarter of a percentage point.

* The U.S. Federal Reserve starts its two-day meeting on Tuesday and, while it is expected to keep rates unchanged, there is speculation that it might drop or alter its pledge to keep rates low for an "extended period".

* U.S. crude futures held steady above $78 barrel on Tuesday, after rising the previous day when a trio of U.S. economic reports with positive news pushed Wall Street higher and took the oil market with it.

* U.S. stocks rose on Monday after another round of solid economic reports but pulled off session highs after a Federal Reserve official's warning about banks' loan losses.

* India's front-month gold future contract on the Multi Commodity Exchange of India Ltd struck a record high of 16,099 rupees per 10 grams on Monday, following a rise in global gold due to a weaker dollar.

DATA EVENTS

* The following data is expected on Tuesday:

- U.S. FOMC Starts Interest Rate Policy Meeting

- U.S. Auto Sales for October

- ICSC/Goldman Sachs U.S. Chain Store Sales (1245 GMT)

- Redbook Weekly U.S. Retail Sales (1355 GMT)

- U.S. Factory Orders for September (1500 GMT)

- ABC U.S. Weekly Comfort Index (1700 GMT)

- API Weekly National Petroleum Report (2130 GMT)

- Markets in Japan are closed for a holiday

PRICES

Precious metals prices at 0042 GMT

Metal Last Change Pct chg Day ago pct MA 30 RSI

Spot gold $1063.60 $4.45 +0.42% +18.57% $860.10 60

Spot silver $16.59 $0.16 +0.97% +38.48% $11.29 44

Spot plat $1340.00 $6.00 +0.45% +1.32% $1330.74 52

COMEX gold $1064.50 $4.60 +0.43% +1.87% $1037.68 60

Currencies

Euro/dlr $1.480 -$0.007 -0.48% -1.32%

Dlr/yen 90.41 -1.79 -1.94% -1.85%

(Reporting by Lewa Pardomuan; Editing by Jonathan Leff)

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