Gold prices edged higher on Tuesday as a subdued dollar provided support though caution ahead of a policy meeting where the U.S. Federal Reserve might clarify its tapering plans kept trading to a tight range.

Spot gold was up 0.1% at $1,766.04 per ounce by 1131 GMT, while U.S. gold futures were up 0.2% to $1,767.20.

"The big question that needs to be answered is will the current market uncertainty change any prospective timeline that the Fed might have when it comes to announcing its tapering of asset purchases," said Michael Hewson, chief market analyst at CMC Markets UK.

"That more than anything is likely to put further downward pressure on gold."

The U.S. central bank concludes a two-day meeting on Wednesday. Some market watchers believe it could announce tapering of asset purchases in the fourth quarter, and as a result push gold lower. 

Reduced central bank stimulus and interest rate hikes which tend to lift bond yields, raise the opportunity cost of holding non-interest bearing gold. It also helps boost the dollar, further weighing on bullion.

Offering some respite to gold, the U.S. dollar slipped 0.2% after hitting a near one-month peak in the previous session.

Fawad Razaqzada, analyst with ThinkMarkets also said, with uncertainty over the stock markets remaining elevated despite Tuesday's rebound, it is not unreasonable to expect some haven flows into gold "amid risk of contagion from the debt crisis".

"The gains have so far been very limited," he added.

World stocks stabilised and investors grew more confident that contagion from debt-laden Chinese developer Evergrande would be limited. 

Elsewhere, silver rose 1.3% to $22.53 per ounce, platinum climbed 1.1% to $920.67, and palladium gained 2.7% to $1,936.71.

(Reporting by Arundhati Sarkar in Bengaluru; editing by Mark Potter and Jason Neely) ((Arundhati.Sarkar@thomsonreuters.com; twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))