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PRECIOUS-Gold steady ahead of Fed policy decision

   * Dollar weakens ahead of Fed statement at 1800 GMT
    * Gold technical resistance seen at $1,321.60

 (Updates prices)
    By Peter Hobson
    LONDON, Sept 20 (Reuters) - Gold prices were steady on
Wednesday, aided by a weaker dollar ahead of a U.S. Federal
Reserve policy announcement at 1800 GMT that could signal
whether it will raise interest rates for a third time this year.
    A threat by U.S. President Donald Trump to "totally destroy"
North Korea also helped to push the dollar lower while
stimulating demand for gold, seen as a safe investment in times
of uncertainty.                                       
    A weaker dollar makes gold cheaper for holders of other
    Spot gold        was flat at $1,311.21 an ounce by 1345 GMT,
having hit a 2-1/2 week low on Monday at $1,304.10.
    U.S. gold futures         for December delivery were up 0.4
percent at $1,315.20. 
    "The dollar is under pressure ahead of the Fed," said ABN
AMRO analyst Georgette Boele. "But I think it's more to do with
the comments from Mr Trump, which are affecting the dollar and
indirectly gold as well."
     The Fed is expected to say that it will start to reduce its
balance sheet, and investors will scour its forecasts and a news
conference by Chair Janet Yellen for clues on the interest rate
    Gold is sensitive to rising rates because they increase bond
yields, making non-yielding assets such as bullion less
attractive while also tending to boost the dollar, in which gold
is priced.
     Markets are pricing in a 56 percent probability of the Fed
raising rates in December.           
     "We suspect that the central bank will reiterate its dovish
stance and likely weaken the dollar in the process," INTL
FCStone analyst Edward Meir said in a note. 
    "We could see a modest bounce in gold over the next day or
two, but nothing that will take the precious metal outside of a
relatively tight trading range for the time being." 
    A range of $1,300-$1,290 would be a good base for gold
unless the Fed changes its stance on interest rates, said one
precious metals trader in Sydney, adding that geopolitical risks
would support prices. 
    Technical fibonacci support was around $1,300 with
resistance at $1,321.60, ScotiaMocatta analysts said in a note. 
    In other precious metals, silver        was down 0.3 percent
at $17.27 an ounce, platinum        lost 0.1 percent to $947.50
and palladium        was down 0.4 percent at $904.50.


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