Gold rose on Wednesday as a deadline for an additional round of US tariffs on Chinese imports loomed with no phase-one deal in sight, while palladium again soared to a record on supply woes. Markets also held positions ahead of a US central bank policy meeting, where it could provide an outlook for 2020.
Spot gold gained 0.4% to $1,470.20 per ounce as of 1:42 p.m. ET (1842 GMT), extending gains into a third straight session.
US gold futures settled 0.5% higher to $1,475.
US President Donald Trump has only days to decide whether to impose tariffs on nearly $160 billion in Chinese goods, a move that would exacerbate the 17-month trade war.
Top economic and trade advisers from the White House are expected to meet in coming days with Trump, a source told Reuters, though a final decision has not been made.
"Gold has been up because of the uncertainty of the trade talks, along with the FOMC meeting this afternoon," said Bob Haberkorn, senior market strategist at RJO Futures.
In announcement after its policy meeting, due at 1900 GMT, the Fed is widely expected to hold rates steady, with investors watching for changes to its view on the economy and its 2% growth forecast for next year.
Better-than-expected US consumer prices in November supported the Fed's intention not to cut interest rates again.
The European Central Bank is also expected to keep rates steady at a meeting on Thursday.
"The global economy appears to have stabilized after a year of growth uncertainty. If yields on US 10 (Treasury) yields rise above 1.90%, we think that will signal the end of gold's rally and push prices below $1,400/oz," analysts at OCBC bank said in a note.
Palladium rose 0.9% to $1,912.83 an ounce, having scaled a fresh peak of $1,913.34, on concerns that stagnating supply of the autocatalyst metal may fail to meet demand.
Adding fuel to supply concerns, prices zoomed past the key $1,900 level on Tuesday after mines across South Africa began shutting down after flash flooding triggered the most severe power blackouts in more than a decade.
Palladium was on track for a 14th straight session of gains.
Platinum jumped 1.8% on Wednesday to $938.40, an over one-month high.
South Africa is a major producer of palladium and also has the biggest and most lucrative platinum reserves.
Meanwhile, spot silver rose 0.8% higher to $16.80 an ounce.
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