Gold rises in London

Gold rose for a second day on Wednesday, profiting from a weaker dollar, which came under pressure ahead of a US Federal Reserve interest rate decision, while silver pared some of the previous day's slide.
The Fed is not expected to signal any rush to scale back its multi-billion dollar support mechanisms for the economy, so investors are waiting to hear more on the outlook for monetary policy from chairman Ben Bernanke when he gives the central bank's first post-decision news conference later in the day.
With the dollar under pressure and its inverse link to gold strengthening for the first time in a week, the bullion price was set for a second day of gains, although a string of public holidays in the United Kingdom restricted volumes. Spot gold was last up 0.7 percent at $1,510.50 an ounce by 1400 GMT, about 0.8 percent below Monday's record high at $1,518.10. US futures for June delivery were last up 0.5 percent at $1,510.90.
"It is definitely the main event that the market is looking ahead to," said Credit Suisse analyst Tom Kendall. "We've seen yet again the dollar under pressure ahead of that statement and precious metals definitely benefiting and base metals soggy," he said, adding he expected to see no change in the Fed's stance on policy, although the key drivers for the gold price remained in place.
Gold could continue to draw strength from any weakness in the dollar, particularly if the Fed maintains its accommodative policy stance, in contrast with the European Central Bank, which has raised rates as it attempts to curb inflation. "The market is a bit mixed ahead of the Fed meeting, which will influence the move of the dollar and precious metals," said Peter Fung, head of dealing at Wing Fung Precious Metals based in Hong Kong.
Silver steadied somewhat, following its largest one-day fall in a month the previous day. The price is on track for a 21-percent gain this month and a 47-percent rise this year, making it the top performing precious metal. Dealers in Asia said strong physical demand was offering some support to silver, although holdings of silver in the world's largest exchange-traded funds staged their largest one-day outflow in nearly two weeks by April 26.
Spot silver was up 0.4 percent at $45.68 an ounce, having recovered from a 3-percent drop on Tuesday, its largest one-day slide in six weeks. US silver was last up 1.4 percent at $45.62. Implied volatility in silver options has been at its highest this week since November last year as the spot price has swung from lows around $43 to highs above $49 in the space of a week. Platinum was last up 0.6 percent at $1,805.99 an ounce, while palladium was up 0.4 percent at $752.97.