Gold prices edged down on Tuesday as the dollar held firm near two-month highs, while investors awaited the outcome of a two-day US Federal Reserve policy meeting expected to result in a cut in interest rates.
Spot gold was down 0.1 percent at $1,425.11 per ounce as of 0427 GMT (0727am Riyadh time).
US gold futures rose 0.3 percent to $1,424.30 an ounce.
"Liquidity is still thin as traders seem to be holding back before the Fed gives its views on monetary policy," said Benjamin Lu, an analyst at Phillip Futures, adding that a firm dollar was putting pressure on gold prices.
"We are also looking at the tone of the Fed speech and how many more cuts are expected. Financial markets are expecting two more cuts in the second half ... Overall, we are quite bullish on gold," Lu added.
The US Fed begins its policy meeting on Tuesday, at which it is widely expected to lower interest rates by 25 basis points (bps). If implemented, it would be the central bank's first rate cut in a decade.
Meanwhile, the dollar firmed near a two-month high, as expectations of aggressive Fed rate cuts waned. A stronger dollar makes gold costlier for holders of other currencies.
On the technical side, spot gold remains neutral in a range of $1,412-$1,427 per ounce, and an escape could suggest a direction, according to Reuters technical analyst Wang Tao.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.83 percent to 824.89 tonnes on Monday from Friday.
Among other precious metals, silver was down 0.1 percent at $16.44 per ounce and platinum fell 0.2 percent, to $877.12.
Palladium slipped 0.5 percent to $1,546.25 per ounce, after touching a near two-week high in the previous session.
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