Gold edges up ahead of Fed as softer dollar, weak data support

SINGAPORE (Reuters) - Gold ticked higher on Wednesday on a softer dollar and weak U.S. economic data, but the metal traded in a tight range as investors waited for the Federal Reserve's policy decision later in the session.

FUNDAMENTALS

* Spot gold had risen 0.2 percent to $1,245.40 an ounce by 0041 GMT, following a 0.4-percent gain in the previous session.

* Data on Tuesday showed orders for long-lasting U.S. manufactured goods rebounded far less than expected in March as demand for automobiles, computers and electrical goods slumped, suggesting the downturn in the factory sector was far from over.

* The report also implied that business spending and economic growth were weak in the first quarter. Prospects for the second quarter darkened after another report showed an ebb in consumer confidence in April.

* The dollar closed 0.3-percent lower against a basket of major currencies as investors believed the weakness in the U.S. economy would prompt the Fed to be cautious about raising rates.

* The U.S. central bank began its two-day policy meeting on Tuesday. The Fed is considered certain to keep rates steady later on Wednesday, so the focus rests squarely on the tone of its statement.

* 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.

* Gold prices that hit a 13-month high last month are likely to fall back in the short term because of a slump in demand from key Asian consumers, 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, as buying from leading consumers India and China plummeted, GFMS said in the first-quarter update to its Gold Survey 2016.

* China's net gold imports via main conduit Hong Kong climbed to a three-month high in March on restocking after the new year holiday, but market sources said consumer demand remained soft.

* Slowing silver supplies combined with firm manufacturing and investment demand could give silver prices strong support in 2016, CPM Group said on Tuesday.

(Reporting by A. Ananthalakshmi; Editing by Joseph Radford)