The Fed is scheduled to meet today to consider revision of interest rates. The US banking sector regulator has already cut the rate at which it lends to banks by 0.25 per cent to 3.25 per cent at an emergency weekend meeting on Monday.

Feb chief Ben Bernanke is likely to cut interest rates to help stabilise the US financial markets which have been battered by worsening credit problems, analysts said.

"Federal Reserve's 0.75 per cent rate cut as against general expectations of a 1 per cent cut would have a negative impact on both gold and oil prices," India Infoline's [Get Quote] analyst Tarang Bhanusali told PTI.

Gold spot trading at $1007 may find support at $998, while crude futures trading at $106.5 may find support at $975, Bhanusali said. "The slowing of the US economy may also start to slow down the oil market," a Sharekhan analyst said.

Gold April 2008 contract on Multi Commodity Exchange (MCX) has reacted marginally at Rs 13,120 per 10 gram as against 13,330 on Monday. Crude June 2008 contract also stood lower at Rs 4,244 per barrel as compared with Rs 4,302 per barrel.

"With the Japanese yen hitting a high of 95 and with the euro at 1.5904, the story is absolutely bullish for gold and silver. But at the same time, the risks are also very high. Buying gold at unforeseen prices of $1,026 and silver at $21.20 an ounce can well be a dangerous thing to do," Sharekhan bullion analysts said.