Gold dipped below $900 today (April 28), off a near four-week high hit the previous day, after the dollar gained against the euro and speculative buying sparked by fears of a global flu pandemic receded.

Investors shifted their attention to a Federal Reserve meeting at a time when the U.S. economy has shown some signs of improvement. Falling oil prices also prompted investors to lock in profit after gold's recent rally.

Gold was at $899.35 an ounce, down $7.40 from New York's notional close, the first time it has fallen below $900 since Thursday. It jumped to its highest since early April at $918.25 yesterday.

'The Fed is likely to keep rates as they are but the markets will be interested in listening to what they have to say about the economy and what they are going to do moving forward,' said Adriah Koh, an analyst at Phillip Futures in Singapore.

'I am still a little hopeful for gold to head higher, but I guess we need more confirmation perhaps over today or the next for gold to head higher,' he said.

The euro slipped 0.1 per cent versus the dollar while the yen climbed to a seven-week peak against the euro after worries the outbreak of swine flu dampened risk appetite.

The virus has killed up to 149 people in Mexico, and the WHO moved closer yesterday to declaring it the first flu pandemic in 40 years after more people were infected in the United States and Europe.

'I don't think the full implications of the swine flu are really understood yet so we cannot really attribute the movements to that. I guess the broader picture will be focused on the stock markets and the stress test results,' said Koh.

Policy-makers are likely to focus on whether signs of life seen in the economy in February are signalling that the worst is over for a severe recession that started in December 2007, or just the prelude to another decline.

'There's selling that triggered some stops below $900 but the market was so thin. We don't even see any interest from the physical side after the drop. It seems nobody is doing anything,' said a dealer in Hong Kong.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings remained unchanged from the previous day at 1,104.45 tonnes on April 27.

The amount of metal ETF Securities holds to back its London platinum and palladium exchange-traded securities rose by 2.4 per cent and 4.4 per cent respectively in the week to last Friday (April 24), the company said. – Reuters