* Fed meeting April 26-27 an event risk
* Gold, silver volatility related to options activity
* U.S. stock markets hit year high (Updates prices, recasts, previous dateline LONDON)
By David Sheppard
NEW YORK, April 26 (Reuters) - Silver was on course for its largest one-day fall in six weeks on Tuesday after having hit a 31-year high in the previous session, while gold came under pressure from investor uncertainty over the likely course of U.S. monetary policy.
Spot silver fell 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.
Silver was last bid at $45.04 an ounce at 11:48 a.m. EDT (1548 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 to hit its highest level since mid-November.
U.S. silver futures saw record volume on Monday, with over 300,000 lots changing hands, with another 225,865 trading before midday on Tuesday.
Silver futures for May were down at $45.00 having closed at $47.15 on Monday.
The iShares Silver Trust, the world's largest silver-backed exchange-traded fund, also saw heavy trading, with a record 34.93 million shares trading on Monday and a further 12.6 million shares changing hands in early trading on Tuesday.
"Everyone has heard that silver is in a parabolic uptrend, but it now appears ready to take at least a respite to calm down a bit," wrote Larry McMillan, president of McMillan Analysis Corp, in a report.
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 0.7 percent at $1,499.00 an ounce, while U.S. gold futures for June delivery were down 0.6 percent at $1,499.45.
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.
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 started 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 program.
Solid earnings from U.S. companies, including Ford, 3M Co and United Parcel Service lifted stocks on Tuesday, helping the S&P 500 and the Dow industrials set highs for the year.
Consumer confidence in the United States also picked up in April, despite rising gasoline prices. The Conference Board, an industry group, said its index of consumer attitudes rose to 65.4 in April from a revised 63.8 in March, though it remains low by historical standards.
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.
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 at $1,807.48 an ounce, down from Monday's last quote at $1,819.30, while palladium traded at $757.50 an ounce versus $757.80 on Monday. (Additional reporting by Doris Frankel in Chicago, Amanda Cooper and Pratima Desai in London; editing by Marguerita Choy)