Gold steady ahead of FOMC meet as investors await monetary policy cues
Gold was steady on Wednesday as investors awaited news on the U.S. central bank's stance on monetary policy, while some easing of the oil market's woes dented demand for safe-haven bullion.
Spot gold was barely changed at $1,501.39 per ounce as of 0708 GMT. U.S. gold futures were 0.3% lower at $1,509.10 per ounce.
"Gold prices are trading with weak momentum. Last week the ECB (European Central Bank) already cut interest rates, now the focus will be on the FOMC (Federal Open Market Committee)," said Jigar Trivedi, a commodities analyst at Mumbai-based Anand Rathi Shares & Stock Brokers.
"The recent high near $1,560 in gold is a good resistance as of now. I do not think prices will go above it, lest the Fed indicates there will be another rate cut in December."
Economists and analysts widely expect the U.S. Federal Reserve to cut its benchmark rate for a second time this year to counter risks posed by the U.S.-China trade war.
The chaotic moves in money markets and late-day swings in U.S. federal funds futures mean the CME's tool shows about a 65% chance that the Fed will cut rates by 25 basis points on Wednesday.
Denting safe-haven appeal for gold, Saudi Arabia sought to reassure markets after the attack on Saturday halved its crude oil output, saying full production would be restored by the month's end.
A risk-on sentiment in the market affects demand for bullion, often seen as an alternative investment during times of political and financial uncertainty.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.13%, while the dollar was little changed against a basket of other currencies at 98.36.
Spot gold remains neutral in a range of $1,488-$1,523.61 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.
"Gold's correction below $1,500 after touching this year's highs above $1,550 is seen as healthy. Further consolidation is expected over the next few weeks, especially as trade headlines continue to exert their influence on near-term price action," UBS analysts said in a note.
Also in focus is the Bank of Japan's policy meeting due on Thursday. The central bank is expected to ease its policy this year.
Among other precious metals, platinum dropped 0.5% to $938.33 per ounce, while silver eased 0.6% to $17.90 an ounce. Palladium dipped slightly to $1,598.68.