Gold little changed as investors await Fed's view on stimulus outlook

Gold traded in a tight range on Wednesday as investors awaited the outcome of a US Federal Reserve meeting for clues on possible tapering of economic support measures, while a firmer dollar weighed on the metal.

Spot gold was steady at $1,859.90 per ounce by 0657 GMT. It fell to its lowest since May 17 at $1,843.99 on Monday. US gold futures rose 0.3% to $1,862.30.

"Gold has been down for a few days and this reflects in the building anticipation that (the Fed's) tapering of QE might start faster than the market is currently expecting," DailyFX currency strategist Ilya Spivak said.

"Gold has entered the next leg down. Immediate support at this stage is around $1,850. If we can break that with the help of the (Fed meet) over the next 24 hours, gold might head towards $1,800."

Making gold more expensive for holders of other currencies, the dollar held steady near a one-month high against its rivals.

Data on Tuesday showed US retail sales dropped more than expected in May, while producer prices jumped by 6.6% year-over-year during the month, the largest gain since November 2010.

Recent data showing a spike in US consumer prices have raised concerns over rising inflation. However, Fed officials have said rising inflationary pressures are transitory and ultra-easy monetary settings would stay in place for some time.

The US central bank is expected to acknowledge the first conversations among its policymakers on when and how fast to pare back the massive bond-buying program launched in 2020 at the end of its policy meeting later in the day.

Meanwhile, data from China showed the country's industrial output grew 8.8% in May from a year earlier, while retail sales rose 12.4%.

Elsewhere, silver gained 0.4% to $27.74 per ounce, palladium eased 0.1% to $2,760.55 and platinum fell 0.4% to $1,148.49.