PRECIOUS-Gold falls on firmer equities, Fed statement eyed

(Updates prices)
* U.S. Fed policy decision due at 1800 GMT
* U.S. economy contracts 4.8% during 1st qtr
* Worldwide coronavirus cases at over 3.1 million
* For an interactive graphic tracking the global spread,
open https://tmsnrt.rs/3aIRuz7
in an external browser

By Eileen Soreng
April 29 (Reuters) - Gold fell on Wednesday as optimism
around the easing of coronavirus-led lockdowns and hopes of a
potential treatment drug propped up risk assets, while investors
awaited the U.S. Federal Reserve's monetary policy statement
later in the day.
Spot gold XAU= fell 0.4% to $1,701.36 per ounce at 1:39
p.m. EDT (1739 GMT), having fallen for three previous sessions.
U.S. gold futures GCv1 settled down 0.5% at 1,713.40.
"You just have the risk-on sentiment from U.S. equity
markets... I think there's some profit taking in gold right now
and a lot of people are getting repositioned for the next flight
up in gold," said Michael Matousek, head trader at U.S. Global
Investors.
Wall Street jumped following an encouraging update from
Gilead Sciences GILD.O on a potential COVID-19 treatment and
upbeat earnings. .N MKTS/GLOB
Sentiment also improved as parts of the United States,
Europe and Australia gradually eased restrictions. New Zealand
this week allowed some businesses to reopen.
All eyes are now on the U.S. Fed, which is scheduled to
release a statement at 1800 GMT, followed by a news conference
by Chairman Jerome Powell.
"Nobody wants to take any undue risk before that meeting so
you're seeing gold drift, but once the meeting comes out and if
the Fed confirms everybody's thoughts, I think you'll start to
see more action in gold," Matousek said.
The Fed, which has pumped trillions in emergency funding
into U.S. financial markets, is expected to reiterate its
promise to do whatever it takes to support the economy.
The U.S. central bank may also signal how long, and by what
benchmark, it plans to leave interest rates near zero after the
recovery begins from what many economists forecast will be the
sharpest downturn in recorded U.S. history this quarter.
A Commerce Department report earlier in the day showed
advanced first quarter gross domestic product fell at a 4.8%
annual rate as the coronavirus-induced shutdowns at the end of
the quarter shoved the longest U.S. economic expansion into
reverse. "The stars seem to be aligned for gold prices. The
improvement in investor sentiment, aggressive monetary policy
easing, ultra-low interest rates and fiscal stimulus have all
supported gold prices," ABN AMRO said in a note.
Safe-haven gold tends to benefit from widespread stimulus
measures as it is often seen as a hedge against inflation and
currency debasement.
Elsewhere, palladium XPD= gained 1% to $1,935.81 per
ounce, and platinum XPT= rose 0.2% to $773.66. Silver XAG=
fell 0.4% to $15.14.