NEW YORK (MarketWatch) -- Gold futures edged higher to trade near $888 an ounce Wednesday, recovering some ground after their sharp fall in the previous session.
Gold for December delivery gained $2.50 to $888.70 an ounce on the New York Mercantile Exchange.
"Precious metals turned higher following three losing sessions as bargain hunters emerged and picked some up at prices nearly $100 lower than what was on offer two weeks ago," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
On Tuesday, gold futures fell $21.80, or 2.4%, to end at $886.10 an ounce on the Nymex.
After the close of regular gold trading Tuesday, the U.S. Federal Reserve kept interest rates unchanged at 2%, in line with market expectations. A policy statement from the Fed gave no sign that the central bank plans to shift policy in the foreseeable future. See The Fed.
"It looks like the commodity markets may be doing the Fed's job on its behalf at least regarding bringing down inflation," Nadler said. "It's the growth part that has commodity sellers crowding the market exit doors."
Crude-oil futures traded below $119 a barrel Wednesday, ahead of weekly data that are expected to show a decline in crude inventories in the latest week. See Futures Movers.
Crude oil for September delivery dropped 39 cents to $118.78 a barrel in electronic trading on Globex.
With the Federal Reserve's rate-setting meeting out of the way, currency traders have turned their attention to the European Central Bank and the Bank of England, which are both expected to leave key rates on hold Thursday.
Also on the Nymex Wednesday, September silver was flat at $16.57 an ounce, while September palladium gained $10.10 to $364 an ounce. October platinum futures rose $36.50 to $1,621 an ounce.
September copper futures rose 2 cents to $3.44 a pound.
In other metals news, Xstrata (UK:XTA: news, chart, profile) launched a hostile $10 billion takeover bid Wednesday for the world's third-largest platinum producer, Lonmin (UK:LMI: news, chart, profile) , as the Swiss-headquartered, London-listed mining group tries to take advantage of a downturn in prices over the last month and its target's difficulties in extracting the precious metal.
Xstrata said it is offering 33 pounds ($64.60) per Lonmin share, a 42% premium to Lonmin's closing price of 23.19 pounds Tuesday.
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