Gold prices lingered near recent lows on Wednesday as investors prepared for the likelihood of another super-sized interest rate hike from the U.S. Federal Reserve in its effort to tame soaring inflation.
Spot gold was flat at $1,663.73 per ounce, as of 0126 GMT. Bullion hovered close to $1,653.10, its lowest level in more than two years marked last week. US gold futures edged 0.1% higher at $1,686.70.
The dollar index was steady, holding close to a 20-year high hit earlier this month. A firmer greenback makes bullion more expensive for other currency holders.
The Fed's two-day policy meet will conclude on Wednesday, with rate futures traders pricing in an 81% chance of a 75 basis-point hike and a 19% probability of a 100 bps increase.
Higher interest rates increase the opportunity cost of holding non-yielding bullion and boosts the dollar.
The European Central Bank may need to raise interest rates to a level that restricts economic growth in order to cool demand and combat unacceptably high inflation, ECB President Christine Lagarde said on Tuesday.
Swiss exports of gold to top consumer China fell in August from July's 5-1/2-year high, while shipments to Turkey rose to their highest since June 2013, Swiss customs data showed on Tuesday.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.48% to 953.32 tonnes on Tuesday from 957.95 tonnes on Monday.
Spot silver fell 0.3% to $19.26 per ounce, platinum rose 0.2% to $924.10 and palladium was down 0.9% at $2,149.01.
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