London 03/04/2012 - Gold was steady around $1,675 on Tuesday afternoon ahead of the  release of the Federal Open Market Committee (FOMC) minutes later today.

Market conditions remain fairly quiet while Chinese investors remain absent for a three-day national holiday and a strike by Indian jewellers continues.

Spot gold fell $4.80 to $1,673-1,673.30 per ounce. The metal has traded in a narrow sub-$15 range today between $1,681.35 and this afternoon's low of $1,667.20.

Market participants are happy to remain on the sidelines during the short trading week and ahead of the minutes of the latest Federal Reserve meeting, which will be scrutinised for clues on near-term monetary policy.

The likelihood that the Fed will loosen monetary policy further through quantitative easing (QE) - which would be bullish for gold by debasing the value of the dollar - has diminished on signs of a tentative recovery in the US economy, backed up by a generally positive trend in data out of the country.

Today, for example, although US factory orders came in below forecast, "the reading of 1.3 percent for February was still the strongest in three months and, moreover, represents a significant positive swing of 2.3 percentage points", FastMarkets analyst Jono Remington-Hobbs pointed out.

Gold dropped from around $1,770 at the end of February to just above $1,660 at the end of March on shrinking expectations that the Fed will embark on a third round of QE. Still, some market observers have not ruled out the possibility completely.

""We consider the drop in the gold price to be a buying opportunity as we expect the US economy to surprise on the downside over coming months, which should result in the implementation of [QE3]," Société Générale analyst Robin Bhar said on Monday.

In wider markets, the euro was steady at 1.3333 against the US dollar, stepping back slightly from an intraday high of 1.3368.

In Asia, buying remains sluggish due to high prices and a strike by jewellers after the government said it would double gold coin and bar duties to just above four percent. Market participants in Asia hope it will reverse this decision.

Among other precious metals, silver was steady at $33.01-33.03 per ounce but down from a two-week high of $33.25 hit in the previous session. Platinum fell $3 to $1,652-1,662 but palladium dropped $9 to $649-658.

US carmakers reported strong car sales in March - Chrysler Group sold 163,381 light vehicles in the US in March, a 34-percent increase on the same month of last year. GM's light vehicles sales were up 12 percent at 231,052 units and Ford Motor Co had its best month since 2007, selling 223,418 vehicles, a five-percent gain on March 2011.


(Additional reporting by Tom Jennemann, editing by Mark Shaw)

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