Gold falls ahead of Fed meeting; investors shy away

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold fell on Tuesday to track sliding oil, with a weaker euro also prompting investors to turn their back on the metal ahead this week's Federal Reserve meeting on interest rates.

Gold often takes cues from movements in the dollar because of its role as an alternative investment to currencies, stocks and bonds. The outcome of the Fed meeting would set the tone for currencies and precious metals, said dealers.

Gold fell to $887.50/888.50 an ounce from $891.65/892.65 late in New York on Monday, when it hit an intraday day high of $895.50 an ounce on speculative buying driven by record high oil.

Trading was thin with Japanese players away for a holiday.

"Everybody is waiting for the Fed," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"I think gold has to stay above these levels before it can charge higher again. The range is still the same at between $880 to $900 for today and tomorrow."

Gold was still trading well below a lifetime high of $1,030.80 an ounce hit on March 17, with attempts to revisit the level met by heavy profit taking.

"People started to sell because of a weakening euro. The physical market is deserted after we saw pretty good demand from Southeast Asia yesterday," said a dealer in Hong Kong.