Gold was stuck just below $1,300 an ounce on Wednesday ahead of a US Federal Reserve policy announcement that could trigger a sharp move in prices.
Investors expect the Fed to raise interest rates but want to know if it intends to tighten policy four times in 2018 or three times, as it indicated earlier this year.
A clear hint in the announcement at 1800 GMT or the news conference at 1830 GMT could knock gold out of the tight range of about $1,290 to $1,305 in which it has traded since mid-May.
More rate rises would hurt gold because they push up bond yields, making non-yielding bullion a less attractive investment, and tend to strengthen the dollar, increasing the cost of gold for buyers using other currencies.
Gold prices have tended to fall before recent US interest rate rises, as investors anticipate the change, but rally afterwards.
“It might be different this time,” said Robin Bhar, head of metals research at Societe Generale. “Forward guidance will be crucial ... That will dictate direction in the short term.” Spot gold was flat at $1,295.86 an ounce at 1339 GMT and US gold futures for August delivery were also almost unchanged at $1,299.80.
The dollar weakened slightly against a basket of major currencies, giving gold some support.
Reinforcing the cautious mood were policy announcements expected from the European Central Bank (ECB) on Thursday and Japan’s central bank on Friday, which could affect gold prices.
The ECB is expected to signal a wind-down of its huge bond-buying programme, which could strengthen the euro and boost gold demand in Europe.
Holdings of gold by exchange-traded funds (ETFs) tracked by Reuters have decreased by 1.4 million ounces, or 2.4 per cent, since late May, while bets on higher prices on the Comex exchange remain low after falling last month to the fewest since January 2016.
Reuters technical analyst Wang Tao said gold had to break from its trading range, which has been gradually tightening, and is likely to drop towards $1,263-$1,278 an ounce.
Fibonacci technical support was at $1,286, with resistance at $1,301.40, said ScotiaMocatta analysts. Gold is likely to fall unless it moves back above the 200-day moving average around $1,307, they said.
In other precious metals, silver was up 0.5 per cent at $16.94 an ounce after hitting a seven-week high of $16.99.
Platinum was unchanged at $894 and palladium dropped 1 per cent to $1,008.85.