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SINGAPORE: Gold traded in a narrow range in Asian trade on Wednesday as market participants awaited the US Federal Reserve’s monetary policy decision and developments around a coronavirus stimulus package in the world’s largest economy.

Spot gold was down 0.1% to $1,848.60 per ounce by 0744 GMT. US gold futures eased 0.2% to $1,846.60.

“Gold appears to be in a holding pattern as investors are waiting for the Fed,” said Jeffrey Halley, a senior market analyst at OANDA.

The US central bank is expected to stand pat on policy when it announces its decision at 1900 GMT. Investors will be watching for comments from Fed Chairman Jerome Powell for clues on the state of the economy.

“If Powell remains ultra-dovish and indicates they have no intention of tapering, that can boost gold up to $1,880, although if he sounds optimistic about the economic recovery, gold can touch near $1,800 levels,” Halley said.

Easy monetary policy adds pressure on government bond yields and benefits non-yielding gold.

Also in focus was US President Joe Biden’s $1.9 trillion stimulus plan, which has been met with objections from Republicans over the price tag.

“The new round of fiscal stimulus may not arrive before mid-March, which is later than what the market had expected... so eventually we may see a delayed and smaller stimulus, which is not good for gold,” said DailyFX strategist Margaret Yang.

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