PRECIOUS-Silver slides from highs, drags gold along

* Fed meeting an event risk

* Gold, silver volatility related to options activity

* Coming up: April U.S. consumer confidence at 1400 GMT

(Updates with comment, refreshes prices)

By Amanda Cooper

LONDON, April 26 (Reuters) - Silver was set for its largest one-day fall in six weeks on Tuesday after having hit fresh 31-year highs, while gold came under pressure from investor uncertainty over the likely course of U.S. monetary policy.

Spot silver fell earlier by as much as 4.9 percent to a session low of $44.63 an ounce, after having risen to $49.31 on Monday, its highest since touching $49.48 in January 1980. High volatility and the expiry of U.S. silver options added to the intensity of the decline, impacting gold, which fell back from Monday's record of $1,518.10 an ounce ahead of the outcome of the U.S. Federal Reserve's policy meeting on Wednesday.

The Fed is expected to indicate it is in no hurry to raise interest rates, while chairman Ben Bernanke will deliver the first regularly scheduled post-decision news briefing in the bank's 97-year history.

"There are quite a few things coming out in the next day or two -- the FOMC and the GDP release. People are just taking profits on these markets around that event risk," said Standard Chartered analyst Daniel Smith. "The key thing for me is any indication that interest rates might rise."

Silver was last bid at $45.77 an ounce at 1400 GMT, compared with $46.90 late in New York on Monday, set for its biggest daily loss since March 15.

Silver at-the-money implied options volatility has risen by over 35 percent in the last four trading days alone to hit its highest level since mid-November 2010.

"Silver is the most interesting," Standard Chartered's Smith said. "Silver is going to be very volatile over the next couple of weeks from a medium-term perspective, it will be a lot softer."

Gold meanwhile was on course for a second daily decline, in spite of the weakness in the dollar, which usually acts as an incentive to non-U.S. investors to buy the metal.

The spot price was last down 1 percent at $1,494.00 an ounce, while U.S. gold futures for June delivery were down 0.9 percent at $1,494.50.

DOLLAR LINK WEAKENS

However, gold's usual inverse relation to the dollar has been weakening consistently since mid-April, meaning the bullion price will derive less of a bounce from any softness in the U.S. currency.

"The rally has been strong, it's not surprising to see profit-taking ahead of the FOMC meeting," said Peter Fertig, a consultant at Quantitative Commodity Research.

"Markets expect it will be a dovish statement from the U.S. Fed, but there are worries about them ending (Quantitative Easing) ahead of time."

Tighter U.S. policy would restrict the amount of cash in the financial system and could temper concern about inflation, which investors often protect against by buying gold.

The Federal Open Market Committee meeting starts later on Tuesday and concludes on Wednesday. The U.S. central bank is expected to confirm it will stick to plans to complete its $600 billion bond-buying programme. [USD/] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Silver technical outlook [ID:nL3E7FP0WW]

TIMELINE-A brief history of silver [ID:nL3E7CJ0DO]

Gold,silver ETFs holdings: http://link.reuters.com/sen29r

ANALYST VIEW-Silver charges ahead [ID:nL3E7FI1AA] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The dollar fell to a 16-month low against the euro on expectations that U.S. monetary policy will remain accommodative compared to the European Central Bank, which has already begun to raise rates. [USD/]

Traders say part of the reason for the volatility in gold and silver prices is activity related to options -- contracts which give holders the right to buy or sell the underlying security at a fixed price in the futures.

"There's been a rush to cover exposure to these contracts ahead of expiry (maturity)," a trader said. "It's been more pronounced in silver futures."

Silver prices are still up about 50 percent so far this year after gains of more than 80 percent last year.

Platinum was last down 1.2 percent at $1,797.24 an ounce from $1,819.30, while palladium was down 1.5 percent at $747.50 an ounce.

(Additional reporting by Pratima Desai; editing by Alison Birrane)