PRECIOUS-Gold holds tight range as investors await Fed verdict

* U.S. interest rate decision at 1800 GMT
* Focus also on Bank of Japan on Thursday
* Oil prices ease after surge on Saudi attack

(Updates prices)
By Brijesh Patel
Sept 18 (Reuters) - Gold consolidated around $1,500 on
Wednesday, keeping to a $3 range ahead of a U.S. Federal Reserve
decision on monetary policy while fears of oil-led inflation
ebbed, limiting safe-haven inflows into bullion.
Spot gold XAU= was up 0.1% at $1,503.78 an ounce by 1246
GMT, while U.S. gold futures GCcv1 were down 0.1% to
$1,511.90.
"Hopes that Saudi Arabia's production is going to come back
online and oil prices will start to depreciate have boosted
market sentiment, so we continue to see some calm across the
markets ahead of the Fed meeting," said FXTM analyst Lukman
Otunuga.
Oil prices retraced, having surged nearly 15% earlier in the
week, after Saudi Arabia's energy minister said the country
would restore its lost production by month-end, having restored
customer supplies to levels they were prior to attacks on its
key facilities. O/R
Gold is considered a hedge against oil-led inflation.
"There is something about that $1,500 level and gold is
waiting for a catalyst, which will come in the form of the Fed,"
Otunuga said.
The Fed will conclude its latest policy meeting on
Wednesday, buffeted by conflicting economic data and under
steady White House pressure to cut interest rates sharply.
Investors are largely pricing in a quarter-point cut, with
the focus now on how much more easing the central bank signals
for this year and next.
Attention will also be on the Bank of Japan's policy meeting
on Thursday, with the central bank expected to ease its policy
this year. Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar, making
gold cheaper for investors holding other currencies.
The dollar .DXY , meanwhile, rose against a basket of major
currencies.
"The latest price rise (in gold) was very quick and was
driven to a large extent by speculation," Commerzbank analysts
said in a note.
"It is therefore likely to take some time for the gold price
to settle down in any lasting manner above the psychologically
important $1,500 mark. However, we believe that price-supportive
factors should gain the upper hand in the longer term."
Among other precious metals, silver XAG= slipped 0.8% to
$17.88 an ounce, while platinum XPT= dropped 1.1% to $932.34
and palladium XPD= eased by 0.2% to $1,595.04.