Investing.com - Gold futures held near the previous session's eight-month low on Tuesday, as investors positioned themselves for a hawkish shift from the Federal Reserve following the conclusion of its two-day policy meeting due to begin later in the day.
On the Comex division of the New York Mercantile Exchange, gold for December delivery fell $1.60, or 0.13%, to trade at $1,233.50 a troy ounce during U.S. morning hours.
Prices traded in a narrow range between $1,232.70 and $1,242.60. Futures were likely to find support at $1,226.30, the low from September 15 and resistance at $1,251.00, the high from September 11.
A day earlier, gold prices hit $1,226.30, a level not seen since January 9, before recovering to settle at $1,235.10, up $3.60, or 0.29%.
The dollar remained well bid as the Fed was expected to cut its asset purchase program by another $10 billion, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.
Fed officials will release updated economic and interest rate projections at the conclusion of the two-day meeting, extending their forecast horizon through 2017.
Market participants will also pay close attention to a press conference with Fed Chair Janet Yellen on Wednesday for further clues on the timing of the first U.S. rate hike since 2006.
Gold costs money to store and struggles to compete yield-bearing assets when interest rates are on the rise.
Investors were also looking ahead to Thursday's independence vote in Scotland, with polls currently show that the referendum is too close to call. A win for the "Yes" campaign could result in the break-up of the United Kingdom.
Also on the Comex, silver for December delivery inched up 1.8 cents, or 0.1%, to trade at $18.63 a troy ounce.
Elsewhere in metals trading, copper for December delivery tacked on 1.3 cents, or 0.43%, to trade at $3.099 a pound as weakening economic growth in China sparked speculation policymakers in Beijing will have to introduce fresh stimulus to meet the government's 7.5% growth target.
Data released earlier showed that foreign direct investment in China during the first eight months of the year dropped an annual 1.8%, the latest sign that the world's second largest economy is losing momentum.
China is the world's largest copper consumer, accounting for nearly 40% of global demand.