SINGAPORE: Gold prices inched up on Wednesday on a weaker dollar, with investors awaiting the outcome of the Federal Reserve's policy meeting for details of the US central bank's plans to balance interest rates against its inflation target.
Spot gold was up 0.2% at $1,959.38 per ounce by 0645 GMT. US gold futures edged up 0.1% to $1,968.20.
Offering support to gold, the dollar index remained subdued against its rivals.
"People are keeping on the sidelines because of the Fed announcement coming up later today," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.
"People are awaiting for more clarity on what monetary tools the Fed is expected to use to support inflation above 2%."
The Fed decision is due at 1800 GMT, followed by a news conference by Chairman Jerome Powell half an hour later.
The US central bank last month adopted a more accommodative approach to inflation and pledged to keep interest rates low for longer.
"Markets will want to see if the Fed will modify its language as some expect, perhaps something to the effect that it will keep rates low for a period of time (say three years) or maybe do the same thing with its inflation language," said Edward Meir, an analyst at ED&F Man Capital Markets, in a note.
"But, we doubt the Fed will lock itself into such a fixed language ahead of a potential turn in the US economy."
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