LONDON: Gold prices firmed on Wednesday, recovering from the previous session's near two-week low, but moves were muted as traders awaited the outcome of the Federal Reserve's latest policy meeting.
The US central bank is widely tipped to unveil a quarter-point interest rate rise at 1800 GMT, lifting the Fed funds target rate above 1 percent for the first time since the immediate aftermath of Lehman Brothers' collapse in 2008.
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the dollar. Markets await fresh clues on policy after scaling back their expectations for further US rate hikes this year over the last few months.
Spot gold was up 0.2 percent at $1,267.46 an ounce at 0955 GMT, having touched its weakest since June 2 on Tuesday at $1,259.16. US gold futures for August delivery were up $1.50 an ounce at $1,270.10.
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