PHOTO
Gold prices were little changed on Wednesday as investors maintained caution ahead of the Federal Reserve policy meeting, which is expected to start a U.S. monetary easing cycle.
Spot gold was steady at $2,568.63 per ounce as of 0840 GMT. Bullion rose to a record high of $2,589.59 on Monday.
U.S. gold futures were up 0.1% to $2,595.00.
The highlight of the day will be the Fed's interest rate decision due at 1800 GMT, followed by comments from Chair Jerome Powell. Traders are pricing in a 63% chance of a 50-basis-point reduction.
"A more substantial rate cut of 50 bps could push gold prices even higher... Future rate cuts will be the main driver of gold's peak at $3,000," said Julia Khandoshko, CEO at European broker Mind Money.
"When the Fed starts the policy easing, the question will not be if gold reaches unprecedented highs, but when."
Zero-yield bullion tends to be more appealing in a low interest rate environment.
On the geopolitical front, militant group Hezbollah promised to retaliate against Israel after accusing it of detonating pagers across Lebanon on Tuesday, killing nine people and wounding nearly 3,000 others who included fighters and Iran's envoy to Beirut.
This latest attack "may be seen as raising the risk of a wider conflict in the region – which would tend to support safe havens like precious metals," said Frank Watson, market analyst at Kinesis Money.
Spot silver inched 0.4% lower to $30.60 per ounce after hitting a two-month high on Monday.
"After a recent sell-off, silver prices are recovering with rising gold prices. Speculative as well as ETF (exchange-traded fund) holdings for silver are rising," ANZ said in a note.
Platinum was flat at $981.45. Palladium was down 0.6% to $1,108.98 after scaling its highest level since December earlier in the session.
(Reporting by Ashitha Shivaprasad in Bengaluru; editing by Jason Neely)