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 The Fed suggested earlier this year that a near-term rate rise was
on the cards if economic data supported such a move, but slowing
growth in China and a recent drop in commodity prices have led some
to question whether it will be pushed back.
The dollar rose from a two-week low against the yen on Tuesday as
investors focused on the meeting.
Spot gold was at $1,092.90 an ounce at 1147 GMT (0747 EDT), little
changed from late Monday, while U.S. gold futures for August
delivery were down $4.30 an ounce at $1,092.10. Gold hit a low of
$1,077 on Friday, its lowest since early 2010, in a fifth week of
losses.
"Gold is treading water despite a slight improvement in the dollar
and U.S. Treasury yields," Mitsubishi analyst Jonathan Butler said.
"That would seem to indicate some pricing in of the Fed pushing out
interest rate rises further into the future."
Rising interest rates pressure gold by lifting the opportunity cost
of holding bullion, while boosting the dollar, in which it is
priced.
Expectations a near-term hike may be possible are making investors
hesitant to bid up gold despite a price slide, with its failure to
benefit from jitters over Greece this year undermining its appeal as
a haven from risk.
Investor confidence in gold remained shaky after last week's slide
accompanied by big trading volumes in New York and Shanghai. The
metal lost more than 3 percent last week, the most since March.
GFMS researchers at Thomson Reuters said in a report on Tuesday that
global gold demand hit its lowest since 2009 in the second quarter
as China poured funds into equities, which had promised better
returns.
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Also weighing on sentiment, China's net gold imports from main
conduit Hong Kong fell to a 10-month low in June, reflecting weak
demand from the major consuming nation.
China's gold imports could fall as much as 40 percent this year as
demand for bullion used to back domestic financing deals decreases,
said Michael Mesaric, head of the world's biggest refiner Valcambi.
Silver was up 0.1 percent at $14.55 an ounce, platinum was down 0.5
percent at $974.35 an ounce, and palladium was up 0.5 percent at
$614.50 an ounce.
(Additional reporting by Maolo Serapio Jr in Manila; Editing by Dale
Hudson and David Evans)
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