Gold prices rise as investors await US Fed meeting; Spot gold hits $1,718.97 per ounce

Gold inched up on Wednesday, as the dollar weakened slightly, while investors waited for a key decision on interest rates from the US Federal Reserve which could influence the outlook for bullion, amid growing worries over the state of the economy.  

FUNDAMENTALS

* Spot gold firmed 0.1% to $1,718.97 per ounce, by 0041 GMT, while US gold futures dipped 0.1% to $1,716.70. 

* Wall Street equities fell and US Treasuries rallied on Tuesday, a day before a likely Federal Reserve rate hike as investors grappled with growing economic concerns with signs of a looming gas supply crisis in Europe. 

* The US central bank is widely expected to raise interest rates by another 75 basis points at the conclusion of its policy meeting on Wednesday. 

* Higher interest rates and bond yields increase the opportunity cost of holding non-yielding bullion.

* The dollar eased slightly after a sharp rise on Tuesday. A weaker dollar helps gold's appeal among buyers holding other currencies. 

* US consumer confidence dropped to a near 1-1/2-year low in July amid persistent worries about increasing inflation and higher rates, which could undercut spending, pointing to slower economic growth at the start of the third quarter.

* The global economy is in the grips of a serious slowdown, with some key economies at high risk of recession and only sparse meaningful cooling in inflation over the next year, according to Reuters polls of economists. 

* Spot silver rose 0.4% to $18.68 per ounce, platinum gained 0.3% to $876.22, and palladium firmed 0.4% to $2,017.56.