NEW YORK: Gold was little changed on Wednesday as caution set in ahead of a US Federal Reserve policy meeting verdict and uncertainty lingered over a US Congress coronavirus relief package.
Spot gold was flat at $1,959.55 per ounce by 1:32 p.m. EDT (1732 GMT), trading below a record high of $1,980.57 scaled on Tuesday. US gold futures settled 0.5% higher at $1,953.4.
"Any consolidation that we're seeing in gold is a direct result of a bit of wait-and-see attitude ahead of the Fed meeting today and negotiations in Washington over the stimulus package as well," said David Meger, director of metals trading at High Ridge Futures.
Though the environment remains supportive for bullion, if the market believes any pullback in stimulus is likely, that would be a disappointment and the biggest threat to the gold market at this point, he added.
Investors are eyeing the Fed's policy statement, due at 2 p.m. EDT (1800 GMT) for clues about the central bank's monetary stance and its outlook for the economy.
US President Donald Trump said his administration and the US Congress remained far apart on a coronavirus relief bill and suggested he was not in a hurry to strike a deal.
Some support from fiscal policy should prove dollar supportive and would also reduce the pressure on the Fed to deliver additional easing, HSBC analysts wrote in a note.
"This would also be gold bearish and could take some of the steam out of the upside for bullion and lead to consolidation," they wrote.
Massive stimulus packages to aid economies reeling from pandemic-driven woes and a low interest rate environment have helped drive gold prices up over 29% so far this year.
Investors continued to pile into gold-backed exchange-traded funds, with holdings in the SPDR Gold Trust at an over seven-year peak.
Silver dropped 1.5% to $24.20 per ounce, platinum fell 2.2% to $927.45 per ounce and palladium slid 5% to $2,168.35 per ounce.
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