Gold firmed on Tuesday but remained near 5-1/2-year lows as markets braced for this week's Federal Reserve meeting, at which policymakers are expected to give further clues on the timing of a US rate increase. Spot gold was up 0.2 percent at $1,095.28 an ounce at 2:26 pm EDT (1826 GMT), not far from Friday's low of $1,077, its weakest since early 2010.
US gold futures for August delivery settled down 20 cents an ounce at $1,096.40. "Until the Fed provides some clarity on Wednesday, it's difficult to say that we've hit a floor," ING analyst Hamza Khan said. "The volumes we're seeing suggest that this could just be short covering in case the Fed announces some firmer vocabulary." Expectations a near-term hike may be possible are making investors hesitant to bid up gold despite a price slide, with its failure to benefit from jitters over Greece this year undermining its appeal as a haven from risk. Silver was up 0.9 percent at $14.67 an ounce and palladium was up 0.9 percent at $617.50 an ounce.
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