NEW YORK, Jan 28 (Reuters) - COMEX gold prices shot to two-week highs on Wednesday, bolstered by a shaky U.S. dollar at midday and news overnight that Japan was considering the low weighting of its gold reserves, dealers and analysts said.
Separate news that Norway's central bank sold 16 tonnes of gold briefly capped the metal's rise before it recovered and breached resistance on fund and speculative buying.
"I think once gold got above last week's highs it started activating some buying interest," said David Rinehimer, head of commodity research at Citigroup Global Markets.
Before the close, traders said the market mainly awaited the U.S. Federal Reserve's word on interest rates. The Fed held rates flat at 1958 lows to keep the economic recovery rolling but amended the wording on future moves slightly to say it can "be patient" before lifting borrowing costs.
Gold for February delivery gained $4.50 to $414.60 an ounce, trading from $408.20 to $415.00, its highest since Jan 15.
"We broke above last week's high at $413.60 where we started hitting buy stops and seeing the fund money come in," said one New York desk broker.
Traders said gold also got help from comments by Japanese Finance Minister Sadakazu Tanigaki, who said he would be considering gold after he told a parliamentary committee he thought it necessary to take a stand on diversifying Japan's foreign reserve assets, which are mostly dollar-denominated.
Rinehimer played down the immediate impact of the comments. "The Japan news was not very specific -- and it wouldn't take a lot of gold to increase the percentage that they have now," he said.
According to HSBC analyst Alan Williamson, Japan's end-December gold reserves amounted to just 765 tonnes, of 1.5 percent of its total reserve base, the lowest of any industrialized country except Canada.
In currencies, a rising dollar after the Fed's word on rates pushed the euro to $1.2500/05 , off its earlier high of $1.2662.
A stronger dollar often dents buying in dollar-denominated metal such as gold as it becomes more expensive overseas.
Sentiment on the dollar appears generally negative, though analyst expect a period of consolidation ahead of a G7 meeting next week in Florida.
Meanwhile, speculators in COMEX gold have been focused on either rolling positions into April futures out of the February contract before delivery, or on liquidating longs to take profits at high prices, though selling was muted on Wednesday.
Open interest in February after the close plunged 27,442 to 81,853 lots, while April's rose 25,175 to hit at 110,328.
February gold on Jan. 6 hit a 15-year high at $431.50. Citigroup's Rinehimer said he pegged support in the market at $400, with first resistance in the mid-$420s region.
Spot gold was at $410.20/0.80, above Tuesday's New York close at $409.75/0.15. London's afternoon fix was at $411.00.
COMEX March silver gained 7.5 cents to $6.63 an ounce, trading from $6.50 to $6.65, its highest mark since Jan. 13, as gold rose. Spot was quoted at $6.51/53 against $6.53/55 previously. Wednesday's fix was at $6.54.
NYMEX April platinum fell $4 to $850.10 an ounce. Spot traded to $853.00/858.00.
Thinly-traded March palladium advanced $4.40 to $248.40 an ounce. Spot was indicated at $240.00/245.00.