Gold steadies at $1,000 ahead of Fed, funds sell

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold steadied around $1,000 an ounce ahead of the U.S. Federal Reserve's meeting on interest rates on Tuesday, but investors and speculators were still keen to book profits after pushing up the price to record highs.

Gold hit a low of $994 an ounce before rebounding to $1,002.50/1,003.20 an ounce, up from $1,001.00/1,001.80 late in New York. It spiked to an historic high of $1,030.80 an ounce on Monday before profit taking erased most of the gains.

Platinum hit a one-week low, while silver and palladium hovered below their recent highs. COMEX futures rebounded from lows.

"I think we can say there's disappointed selling today because it could not break the high," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

But investors remained bullish on gold and fears of further rises in prices also attracted limited buying from jewellers, said Leung, who pegged support at $990 and resistance at $1,020.

Gold has gained more than 23 percent this year on fears of inflation as crude oil hit records, expectations of further rate cuts and deepening U.S. financial concerns after JPMorgan Chase & Co said it would buy cash-strapped Bear Stearns.

The dollar hovered above its lowest level against the yen in nearly 13 years and a record low against the euro, but was prone to more declines on worries about the U.S. financial system.

The Fed is widely expected to cut interest rates by 1 percentage point to 2 percent at a policy meeting on Tuesday, and investors now see some chance of an even deeper cut.