Gold ekes out gains; eyes on Fed, German ruling

Gold edged higher on Tuesday, paring losses from the previous session, with investors waiting for a key German ruling on the euro zone's bailout funds and a U.S. Federal Reserve decision on possible measures to stimulate the economy.

FUNDAMENTALS:
* Spot gold had edged up 0.2 percent to $1,728.40 an ounce by 0037 GMT, after dropping more than 0.6 percent the session before.

* U.S. gold was little changed at $1,730.90.

* Holdings of gold-backed exchange-traded funds rose to an all-time high of 72.492 million ounces on Monday.

* While all eyes are on the Fed's policy meeting on Wednesday and Thursday, the latest data showed U.S. consumer credit fell in July for the first time in nearly a year, a worrisome sign for an economy that has struggled to create jobs.

* A German constitutional court will rule on Wednesday whether Germany can contribute to the European rescue fund which plays a crucial role in the European Central Bank's plan to fight the region's debt crisis.

* Around 10,000 striking South African platinum miners marched from one Lonmin (LMI.L) mine shaft to another on Monday, threatening to kill strike breakers, as another illegal stoppage hit Gold Fields (GFIJ.J), the world's fourth biggest gold miner.

* China, the world's top gold producer, churned out 31.3 tonnes of the precious metal in July, bringing total output in the first seven months of the year to 208 tonnes, up 7 percent on the year.

* Vehicle sales in China rose 8.3 percent in August from a year earlier, maintaining a steady pace though far from the blistering speed of recent years, as a recent fuel price rise and a slowing economy discouraged consumers from buying.

* The data lent support to platinum group metals, which are widely used to produce autocatalysts. Spot palladium rose to a four-month high of $670.50, before easing to $667.14. Spot platinum traded nearly flat at $1,587.75, retreating from a five-month high of $1,603.50 marked in the previous session.

MARKET NEWS:
* Wall Street stocks fell on Monday as investors locked in gains on a recent rally ahead of possible policy action from the Fed. (.N)

* The euro held steady against the dollar on Tuesday, after dropping for the first time in four days in the previous session, but elevated expectations for the Fed's new stimulus measures will provide more support to the single currency.

Courtesy: Reuters