Gold rises as dollar weakens ahead of Fed policy outcome

Gold rose for a third straight session on Wednesday as weaker-than-expected U.S. data weighed on the dollar ahead of the Federal Reserve's policy decision later in the day.

The Fed is likely to keep rates steady, and the focus rests squarely on the tone of its statement and any timing for an eventual rate hike. The U.S. central bank raised rates in December for the first time in nearly a decade.

Spot gold was up 0.2 percent at $1,245.80 an ounce by 1006 GMT.

"The gold market is on hold before the Fed meeting ... but nobody thinks the Fed will hike rates today and June is hardly an option, which should be negative for the dollar and positive for gold," Danske Bank senior analyst Jens Pedersen said.

Data on Tuesday showed orders for long-lasting U.S. manufactured goods rebounded far less than expected in March, implying that business spending and economic growth were weak in the first quarter. Another report showed an ebb in consumer confidence in April.

"Gold ground higher, continuing to trade in a tight range. The weaker dollar has supported demand, but investors remain wary heading into the central bank meetings," ANZ said in a note.

"An unchanged economic outlook and a more balanced assessment of the risks should enhance the Fed's confidence to proceed with further normalisation," it said.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Bullion has rallied 17 percent so far in 2016 on speculation that the Fed may not raise rates this year amid uncertainty over the global economy.

OCBC Bank said the Fed "could strike a careful balance between calling for gradual policy normalisation and making sense of the recent spate of mixed economic data amid slightly stronger crude oil prices".

A slump in demand from key Asian consumers will likely push gold prices lower in the short term, GFMS analysts at Thomson Reuters said in a report on Tuesday.

Global gold demand tumbled by 24 percent year-on-year to 781 tonnes in the first three months of the year, its weakest quarter in seven years, GFMS said.

Among other precious metals, silver rose 1.1 percent to $17.34, while platinum added 0.9 percent at $1,017 and palladium gained 0.4 percent to $603.

Sensex goes below 26K, down 122 points as Asian cues lie low

The benchmark BSE Sensex gave up over 122 points to fall below the 26,000-level in early trade on Wednesday due to profit-booking by investors and weak Asian cues.

Caution ahead of expiry of April series contracts in the derivatives segment tomorrow influenced sentiment.

The 30-share barometer was down by 122.06 points, or 0.46 percent, to 25,885.24 in early trade, with sectoral indices led by banking, power and healthcare trading lower.

The index had risen 328 points yesterday, tracking a recovery in global stocks and oil prices.

The NSE Nifty dropped by 22.10 points, or 0.27 percent, to 7,940.55.

Brokers said apart from profit-booking, a weak trend in Asia amid caution ahead of a closely watched Federal Reserve policy announcement later in the day and the start of Bank of Japan policy meeting mainly pulled the indices down.

Japan's Nikkei fell 0.59 percent while Hong Kong's Hang Seng shed 0.31 percent in early trade today. Shanghai Composite was quoting almost flat.

The Dow Jones Industrial Average ended 0.07 percent higher in yesterday's trade.

PRECIOUS-Gold retreats ahead of Fed and BoJ policy meetings.

LONDON, April 26 Gold retreated on Tuesday as a rebound in assets viewed as higher risk, such as oil and stocks, diverted some attention from the metal, though prices remained hemmed into a narrow range ahead of a U.S. Federal Reserve policy meeting.

The Fed is expected to hold interest rates steady at the meeting starting on Tuesday, but traders will be watching for changes to its assessement of the U.S. economy, which could point to more rate increases later in the year.

Spot gold was down 0.2 percent at $1,234.81 an ounce at 0930 GMT, while U.S. gold futures for June delivery were down $3.60 at $1,236.60.

"Markets are not expecting the Fed to move, but there will be a lot of focus on the tone of the statement," UBS precious metals strategist Joni Teves said.

"Any continuation of the Fed's dovish tone should continue to underpin gold. Also, we have the Bank of Japan (policy meeting) shortly afterwards, and if both central banks sound dovish, that will feed into this easy policy world that gold investors have been zeroing in on this year."

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

The metal has risen 16 percent this year, chiefly on expectations that the Fed would hold off raising rates further after its first increase for nearly a decade in December.

Economists expect a Fed increase in June, with another by year-end. But interest rate futures show less conviction, underscoring the gap between markets and policymakers on the trajectory of rates.

Supporting gold, the dollar came under pressure from a recovery in the beleaguered yen as prospects of more monetary stimulus from the Bank of Japan remained unclear.

However, European shares rose half a percentage point on Tuesday and oil prices ticked higher, pointing to sharper appetite for higher-risk assets at the potential expense of gold.

Holdings of the world's largest gold-backed exchange-traded fund -- New York-listed SPDR Gold Shares -- fell 0.3 percent to 802.65 tonnes on Monday. They reached a two-year high earlier this year but have since plateaued.

"Comex is heavily long and gold ETFs have stabilised. This may indicate limited investment demand going forward," HSBC said in a note.

Among other precious metals, silver rose 0.2 percent to $17.02 an ounce, platinum gained 0.2 percent to $1,013.10 and palladium fell 0.6 percent to $597.22.

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by David Goodman)

Sensex retakes 26K as global market rebounds, Nifty tops 7,900

 In a remarkable turnaround of fortunes, a rebound in global market saw the benchmark Sensex reclaim the 26,000-mark and the NSE Nifty trade above 7,900, mainly on across-the-board gains following revival of buying in recently beaten-down stocks.

The 30-share index, which fell about 130 points in early trade, staged a strong comeback to regain the crucial 26,000-level by surging 344.62 points, or 1.34 percent, to 26,023.55 at 1345 hours. The gauge had lost 201.45 points in the previous two sessions.

All sectoral indices led by metal, auto, realty and banking were trading in the positive zone, with gains of up to 2.00 percent.

The NSE Nifty retook the crucial 7,900-mark by rising 111.40 points, or 1.41 percent, to 7,966.45 at 1345 hours.

Sentiment turned for the better, in tandem with a higher opening in Europe, with all eyes now on the US Federal Reserve as it prepares for its latest policy meeting.

Maruti Suzuki led the pack of gainers, followed by Tata Steel, BHEL, M&M, Tata Motors, HDFC Bank, Cipla, Asian Paint and ITC, rising by up to 3.73 percent.

Among other Asian markets, the Shanghai Composite index rose 0.61 percent while Japan's Nikkei fell 0.49 percent and Hong Kong's Hang Seng up 0.01 percent.

Meanwhile, foreign portfolio investors (FPIs) net bought shares worth Rs 222.34 crore yesterday, provisional exchange data showed.

Sebi mulls online registration for market entities.

To make it easier to do business, markets regulator Sebi plans to soon introduce a paperless online mechanism for registration as brokerage firms, mutual funds, portfolio managers and other market intermediaries.

The proposed paperless mechanism will also be made available for submission of inspection and action taken reports, periodic filings and payment of fees for all kinds of market intermediaries, a senior official said.

So far, the Securities and Exchange Board of India (Sebi) has implemented online registration mechanism for commodity derivative brokers and a similar system is underway for equity market brokers, while such facilities would be extended for all kinds of market intermediaries soon, he added.

The proposed system would help make it easier for the existing and new market intermediaries to complete their registration and other regulatory filings with Sebi much faster and in a cost-effective way.

The entities that need to get registered with Sebi to do business include brokers, merchant bankers, debenture trustees, mutual funds, domestic and foreign portfolio managers, rating agencies, registrar and share transfer agents, alternative investment funds, depository participants, investor associations, research analysts, venture capital funds and collective investment schemes, among others.

It is mandatory for such entities to get registered with Sebi before doing business to ensure that the investors' interest is safeguarded.

The proposed online system is part of Sebi's Plan of Action for this financial year 2016-17, during which the regulator also intends to conduct a review of its fee structure for various intermediaries, which could be possibly a downward revision.

At its last meeting, Sebi's board was informed that the regulator has been "following the practice of calibrating the fees as per Sebi's requirements from time to time".

"The guiding principle has been to meet the revenue expenditure from the fees collected annually. There have been instances when the fees have been reduced by Sebi if there is enough surplus.

The Board was informed that the next such exercise would be undertaken in 2016-17," a senior official said.

Sebi is estimated to have earned an income of about Rs 350 crore in fees from intermediaries during 2015-16, which it expects to rise to Rs 393 crore in the current fiscal largely due to increase in the number of entities.

At the same time, its total revenue expenditure, including establishment and other administrative expenses, is also expected to rise to Rs 370 crore, from Rs 357 crore in the previous fiscal.

After taking into account the income from investments and other heads, Sebi expects to the end the current fiscal with a surplus on revenue account of Rs 176 crore, as against Rs 179.35 crore in the previous year