Investing.com - Gold futures held steady in cautious trade on Wednesday, as investors stuck to the sidelines ahead of the outcome of a highly anticipated Federal Reserve meeting later in the session.
On the Comex division of the New York Mercantile Exchange, gold for December delivery tacked on $0.70, or 0.06%, to trade at $1,237.40 a troy ounce during U.S. morning hours.
Prices traded in a narrow range between $1,234.10 and $1,239.90. 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 tacked on $1.60, or 0.13%, to settle at $1,236.70, not far from an eight-month low of $1,226.30 hit earlier in the week.
Also on the Comex, silver for December delivery inched down 6.3 cents, or 0.34%, to trade at $18.65 a troy ounce.
Market players prepared for the outcome of the Federal Reserve’s policy meeting later Wednesday, amid speculation the U.S. central bank could adopt more hawkish language.
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.
Investors will also pay close attention to a press conference with Fed Chair Janet Yellen shortly after the decision 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.
Gold prices showed little reaction to a report showing that consumer price inflation in the U.S. fell for the first time in 16 months in August.
The U.S. Department of Labor said that consumer prices declined by 0.2% last month, compared to estimates for a 0.1% gain. Year-over-year, consumer prices rose at an annualized rate of 1.7% in August, below expectations for a 1.9% reading and down from 2% in July.
Consumer prices, excluding food and energy costs, were unchanged in August from a month earlier, disappointing expectations for a 0.2% gain. Core CPI increased at annualized rate of 1.7% in August, down from 1.9% in July.
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.
Elsewhere in metals trading, copper for December delivery lost 2.8 cents, or 0.89%, to trade at $3.138 a pound.
Copper futures jumped 8.0 cents, or 2.61%, to settle at $3.166 on Wednesday on news that China's central bank was providing fresh stimulus to jump-start its economy.
According to reports, the People's Bank of China injected $82 billion into the country's five largest banks to counter a slowdown in the world's second largest economy amid sluggish foreign direct investment and industrial output in August.
China is the world's largest copper consumer, accounting for nearly 40% of global demand.