Gold prices steadied on Tuesday, after falling to a near one-month low in the previous session, as investors awaited the US Federal Reserve meeting for further clarity on rising inflation and monetary policy going forward.
Spot gold was flat at $1,866.15 per ounce, as of 0052 GMT, after falling to its lowest since May 17 at $1,843.99 on Monday.
U.S. gold futures edged 0.1% to $1,868.40 per ounce.
The dollar hovered below a one-month high versus major peers, making gold less appealing for holders of other currencies.
Benchmark U.S. 10-year Treasury yields slipped below 1.50% to hover near a three-month low. Lower bond yields reduce the opportunity cost of holding non-interest bearing gold.
Investors now await the Wednesday outcome of the Fed‘s two-day policy meeting. Nearly 60% of economists in a Reuters poll said a much-anticipated taper announcement will come in the next quarter, despite a patchy recovery in the job market.
Recent data showing a spike in U.S. consumer prices has benefited gold as it is seen as a hedge against inflation. But, rising inflation concerns could also force policymakers into an earlier tapering of currency-depreciating stimulus.
For the second time in less than a decade, the Fed is getting ready to launch a thorny debate over how and when to sunset a massive asset-purchase program that helped cushion an economy battered by the crisis.
Silver rose 0.1% to $27.85 per ounce, palladium was steady at $2,751.68, while platinum gained 0.2% to $1,166.93.