Glittering haven: Gold of various weights and sizes sit at Gold Investments Ltd bullion dealers in London. — Bloomberg
GOLD held steady on Wednesday, as investors refrained from taking big bets ahead of the U.S. Federal Reserve's policy decision due later in the day.
Spot gold was flat at $1,927.75 per ounce, as of 0720 GMT. U.S. gold futures fell 0.1% to $1,943.40.
Gold should hold above $1,900 levels heading into the Fed meeting and the Fed message needs to be heard to grasp bullion's next likely direction, said Matt Simpson, a senior market analyst at City Index.
The Fed's policy decision is due at 1900 GMT, followed by a press conference by Chair Jerome Powell at 1930 GMT. The U.S. central bank is widely expected to scale back rate hikes to 25 basis points (bps) from 50 bps in December.
Lower interest rates tend to be beneficial for bullion, decreasing the opportunity cost of holding the non-yielding asset.
"There is a semi-decent chance that Powell will not deliver the dovish hike markets want... So, that leaves gold vulnerable to a bump in the road at these highs, if we see the inevitable higher dollar and yields in case Powell keeps quiet on a pause or pivot," said Simpson.
Meanwhile, data released on Tuesday showed U.S. labour costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed.
The Bank of England and the European Central Bank are expected to raise rates by 50 bps on Thursday.
India, in its federal budget for 2023/24, announced an increase in duty on items made from gold and platinum.
Among other precious metals, spot silver was steady at $23.70 per ounce, platinum rose 0.2% to $1,012.63 and palladium inched 0.3% higher to $1,654.92. - Reuters
