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PRECIOUS-Gold rises as Evergrande fears persist, market on standby for Fed
Published at 21/09/2021 at 19:47

* Stocks recover from Evergrande-led sell-off

* Federal Reserve will end two-day meeting on Wednesday

* Silver, platinum and palladium rebound from multi-month lows

(Updates prices, adds comment)

By Bharat Gautam

Sept 21 (Reuters) - Gold gained on Tuesday as unease over China's Evergrande insolvency spurred safe-haven buying, ahead of a Federal Reserve meeting that could provide clues on the central bank's timeline for cutting its stimulus to the U.S. economy.

Safe-haven asset gold has gained on "recent concerns about global economic growth, or more specifically, a Chinese economic slowdown," which are enough to outweigh a recovery in equities, said David Meger, director of metals trading at High Ridge Futures.

Spot gold was up 0.7% at $1,776.09 per ounce by 1:59 p.m. EDT (1759 GMT), while U.S. gold futures settled 0.8% higher at $1,778.20.

However, the technical picture for gold "remains near-term bearish", said Jim Wyckoff, senior analyst at Kitco Metals.

"We may be seeing shorter-term futures traders that have been short maybe evening up and doing some short covering ahead of the FOMC."

Positive influences from a slip in the U.S. dollar and gains in crude prices were also lifting bullion, Wyckoff said.

The Federal Open Market Committee will release a policy statement and new economic projections at the end of its meeting on Wednesday. Some analysts believe it could announce the start of the tapering of its asset purchases in the fourth quarter, which could push gold lower.

Reduced central bank stimulus and interest rate hikes tend to lift bond yields, raising the opportunity cost of holding non-interest bearing gold.

"The big question that needs to be answered is will the current market uncertainty change any prospective timeline that the Fed might have when it comes to announcing its tapering of asset purchases," said Michael Hewson, chief market analyst at CMC Markets UK.

Silver rose 1.3% to $22.54 per ounce.

Auto-catalyst platinum climbed 4.7% to $953.48, which Meger said was tracking a rebound in equities as a sign of potential economic growth, while palladium gained 1.6% to $1,916.67.

(Reporting by Bharat Govind Gautam and Arundhati Sarkar in Bengaluru Editing by Paul Simao and Krishna Chandra Eluri)

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