* U.S. Federal Reserve's Open Market committee meets Sept.
* Silver, platinum hit lowest since November 2020
* Dollar at highest in a month
Sept 20 (Reuters) - Gold rose on Monday as fears about the
solvency of Chinese property group Evergrande sparked a flight
to safe-haven assets, but gains were capped by strength in the
dollar ahead of the U.S. Federal Reserve's policy meeting.
Spot gold rose 0.5% to $1,762.66 per ounce by 1753
GMT. U.S. gold futures settled 0.8% higher at $1,765.40.
Investors are rushing to the safety of bonds as fears grow
of a default by Evergrande, driving a drop in yields that is
helping gold, said Bart Melek, head of commodity strategies at
"People are reacting to what's happening in China but this
week's Fed's meeting is also important. Anything suggesting a
fairly earlier tapering would be out of consensus and that would
mean a pretty significant correction in gold prices," Melek
The Fed's Open Market Committee meets on Sept. 21-22.
Gold is considered as a hedge against inflation and currency
debasement likely resulting from the widespread stimulus. A
hawkish move by the Fed would, hence, diminish gold's appeal,
while an eventual interest rate hike would also raise the
opportunity cost of holding the non-interest bearing asset.
World shares were lower as investors fretted about the
spillover risk to the global economy from Evergrande's troubles.
"No doubt those fears of systemic risk ... may well be
feeding into the market," independent consultant Robin Bhar
said. "We typically see flows into the dollar, into gold, into
the yen when investors are worried."
But denting gold's appeal for holders of other currencies,
the dollar index hit a near one-month high.
Silver fell 0.7% to $22.23 per ounce, its lowest
since November 2020.
Platinum dropped 3.5% to $908.52 per ounce, while
palladium shed 6.4%, the most since mid-June, to $1,888.24.
Prices of the auto catalysts are unlikely to rebound until
the demand environment starts looking better, Melek said.
(Reporting by Bharat Govind Gautam and Arundhati Sarkar in
Bengaluru; Editing by Aditya Soni)