Gold prices steadied on Wednesday as worries over rising cases of COVID-19 and expectations of possible inflation from more stimulus measures underpinned the metal, while investors awaited the U.S. Federal Reserve's meeting outcome later in the day.

 

FUNDAMENTALS

* Spot gold was little changed at $1,957.84 per ounce by 0049 GMT. Prices hit an all-time of $1,980.57 on Tuesday before retreating after investors booked profits and the dollar regained some ground. 

* U.S. gold futures rose 0.5% to $1,954.50.

* A Reuters tally showed more than 16.62 million people were infected with COVID-19, including 655,583 deaths. Cases continued to surge in the United States, with four states in the South and West reporting one-day records for virus-related deaths on Tuesday.  

* Underscoring the economic impact from the virus, data on Tuesday showed that U.S. consumer confidence fell more than expected in July. 

* Market participants are now looking at the U.S. Fed's two-day policy meeting, which ends on Wednesday.

* Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.

* SPDR Gold Trust GLD , the world's largest gold-backed exchange-traded fund, said its holdings rose 0.7% to 1,243.12 tonnes on Tuesday. 

* Meanwhile, Republicans in the White House and the U.S. Congress were in disarray over their own plan for providing $1 trillion in new coronavirus aid, as negotiations aimed at reaching a compromise bill with Democrats also sputtered. 

* Asian equities pulled backed on Wednesday as an impasse in U.S. economic stimulus negotiations pushed global stocks lower. 

* Silver dropped 1.1% to $24.31 per ounce, platinum fell 0.1% to $947.29 and palladium slipped 1.1% to $2,259.52.

(Reporting by Brijesh Patel in Bengaluru; editing by Uttaresh.V) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net))