LONDON, June 30: Gold traded narrowly in Europe on Thursday in quiet business ahead of the result of the US Federal Reserve’s interest rate setting meeting later in the day, dealers said.

Spot gold slipped to $436.00/436.75 per troy ounce from $437.10/437.60 late in New York on Wednesday.

The market is looking static because of the Fed meeting. If we get a close today above $437.50, that could be constructive, a dealer said.

The dollar moved in a narrow band against the euro as dealers adjusted positions ahead of the Fed’s decision on interest rates.

In the Fed’s policy statement, due around 1815 GMT, the central bank is almost unanimously forecast to increase its funds rate by a quarter-percentage point to 3.25 per cent and is likely to signal more credit tightening ahead.

The prospect of such a rise, coming a year after the Fed first began pushing rates steadily higher, added to the dollar’s allure compared with the euro.

Gold has normally had an inverse relationship with the dollar but the market has at times ignored that during the past month — reflecting funds’ desire to hold the metal even as the single European currency sank to 10-month lows.

Bullion spiked to its highest in three months last week at $443.60 as funds bought, but expectations of gold reaching the 2005 peak of $446.70 have receded since then as investors booked profits.

Whether gold prices would do better from a dollar positive or dollar negative reaction to the Federal Open Markets Committee is difficult to predict, Barclays capital said in a daily report.

At present, we suspect that speculative interest is still attracted to the long side in gold, particularly with euro gold still trading robustly above 360 euros, it added.

Silver bounced to $7.08/7.11 from $7.04/7.07 late in New York on Wednesday.

In Russia, metals giant Norilsk Nickel said on Thursday it had obtained a long-awaited government approval to disclose data on its platinum group metals (PGMs).

In March, Norilsk said it might first unveil output, sales and stocks data, and disclose reserves at a later stage after completing an audit.

Platinum was at $883.00/888.00 from $883.00/887.00 previously. Palladium was flat at $180.00/185.00. —Reuters