Silver rebounded on Wednesday from sharp falls in the previous session and gold inched upwards as investors cautiously awaited the conclusion of the U.S. Federal Reserve's policy meeting while feeble sentiment in the dollar lent support. The Fed will probably show no hurry to scale back its massive support for the economic recovery, but investors are watching for clues to monetary policy direction from a news briefing by Fed Chairman Ben Bernanke after the meeting. The dollar could come under further pressure if the central bank retained its low interest rates and dovish tone, in contrast to the European Central Bank, which has hiked rates and looked poised to deliver more to curb inflation. "The market is a bit mixed ahead of the Fed meeting, which will influence the move of the dollar and precious metals," said Peter Fung, head of dealing at Wing Fung Precious Metals based in Hong Kong. Gold is likely to trade in the range of $1,500 and $1,510 before making a decisive move, Fung said. Spot gold gained 0.5 per cent to $1,508.59 an ounce by 0559 GMT. It hit a lifetime high of $1,518.10 on Monday. U.S. gold futures GCcv1 inched up 0.4 per cent to $1,509.10. Technical analysis suggested that spot gold might head down towards $1,477, said Reuters market analyst Wang Tao. SILVER REBOUNDS; PHYSICAL INTEREST REMAINS STRONG Silver, the superstar commodity of the year, rebounded from its tumble on Tuesday following Monday's rally to near record levels, with strong support at the $45 level, dealers said. Prices of silver have climbed about 49 percent so far this year, outpacing gold's 6 percent gain. Spot silver bounced 0.9 percent to $45.88 from a 3 per cent dip in the previous session, its biggest one-day loss in six weeks. U.S. silver SIcv1 rose as much as 2.6 per cent to $46.22, before easing to $45.88, up 1.8 per cent from the previous close. Strong physical demand in Asia helped support the sentiment in silver. "I haven't seen much demand for gold or silver from India until recently, probably triggered by rapidly rising prices," said a Singapore-based dealer. MMTC, India's largest bullion importer, plans to double its silver purchases this fiscal year to 1,500 tonnes, to catch up with exploding investment interest. The strength in silver prices may sustain, as the metal is expected to benefit from increasing industrial demand in tandem with recovering global economy.
