Gold prices eased on Wednesday as investors refrained from making significant bets ahead of the U.S. Federal Reserve’s policy decision, while keeping a close watch on developments in the Israel-Iran conflict.

Spot gold fell 0.3% to $3,379.10 an ounce as of 0951 GMT. U.S. gold futures fell 0.3% to $3,396.90.

Attention is fixed on the Fed's two-day policy meeting, which concludes later in the day. The central bank is widely expected to keep rates steady but investors will look for signals on future cuts.

Investors are also waiting to see what Fed Chair Jerome Powell has to say following the meeting.

"Traders are holding back ahead of the Federal Reserve’s interest rate decision later today, while a slight uptick in risk appetite in equity markets is weighing on gold," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades.

S&P 500 futures added 0.3%, while Nasdaq futures gained about 0.4%.

Meanwhile, the conflict between Israel and Iran continues to fuel geopolitical instability, which is keeping a floor under the market, Evangelista added.

Thousands of people were fleeing Tehran on Wednesday after U.S. President Donald Trump said they should leave the capital, while a source said Trump was considering options that include joining Israel in attacking Iranian nuclear sites.

The U.S. is deploying more fighter aircraft to the Middle East and extending the deployment of other warplanes, three U.S. officials told Reuters.

"While gold prices could feasibly fall from current levels over the next six months ... strong demand from central banks and Chinese investors will limit any price falls and keep gold above the $3,000 per ounce level," said Hamad Hussain, assistant climate and commodities economist at Capital Economics.

Elsewhere, spot silver fell 0.2% to $37.18 per ounce, platinum rose 1% to $1,275.39, while palladium was steady at $1,051.75.

(Reporting by Anushree Mukherjee in Bengaluru. Editing by Jane Merriman)