Gold edged higher on Wednesday, holding above the key $1,500 per ounce level, ahead of the US Federal Reserve's monetary policy decision, when the central bank is widely expected to cut interest rates.
Spot gold rose 0.3% to $1,506.98 per ounce at 10:53 a.m. EDT (1453 GMT), while US gold futures were up 0.1% to $1,514.90.
"All eyes are now on the FOMC (Federal Open Market Committee) and the gold market has been pretty sensitive to FOMC and Fed policy this year, so the expectations of a rate cut are supportive for gold," said James Steel, chief precious metals analyst at HSBC.
The Fed interest rate decision is due at 2 p.m. (1800 GMT) with investors largely pricing in a quarter-point cut, with focus on forward guidance as the central bank policymakers are deeply divided on the need for further easing as US economic data improves.
Fed Chairman Jerome Powell will be expected to explain the central bank's position in a news conference after the rate decision.
"Market is going to look for plans for rate cuts down the road. If (Fed's) their language alludes to the fact that there's another cut coming in between October and December, then gold and silver will benefit greatly," said Bob Haberkorn, senior market strategist at RJO Futures.
"But if they err on the side of caution with rates, gold and silver will most likely sell-off for a few sessions before finding some support."
Investors also focused on the Bank of Japan's policy meeting on Thursday.
A Reuters poll suggests the BOJ will keep its policy on hold, 28 of 41 economists expect it will ease its policy this year and 13 believe it may surprise by taking action at the meeting.
Lower interest rates weigh on the dollar, bond yields and decrease the opportunity cost of holding non-yielding bullion.
US Treasury yields fell on Wednesday, while the dollar held steady against a basket of major currencies.
Meanwhile, limiting safe-haven inflows into bullion, oil prices pulled back, having jumped nearly 15% earlier this week following attacks on production facilities in Saudi Arabia, after the major producer said it would restore its output by month-end.
Gold is considered a hedge against oil-led inflation.
Among other precious metals, silver slipped 0.6% to $17.91 an ounce, while platinum dropped 1.1% to $933.10 and palladium fell 0.7% to $1,587.78.