Investing.com - Gold inched higher on Wednesday, but gains were limited as investors awaited the outcome of a Federal Reserve meeting, where interest rates are likely to be raised.
Gold for February delivery on the Comex division of the New York Mercantile Exchange tacked on $3.30, or 0.31%, to trade at $1,064.90 a troy ounce during European morning hours. A day earlier, gold dipped $1.80, or 0.17%.
The Fed is expected to raise rates by 25 basis points at the conclusion of its policy meeting at 2:00PM ET on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement.
With a rate hike already mostly priced in, market players are now focusing on how quickly the Fed will tighten monetary policy in 2016. Many in the market anticipate the pace of increases to be gradual amid concerns over tepid growth overseas and divergent monetary policies between the U.S. and other nations.
The yellow metal is on track to post an annual decline of 10% in 2015, the third yearly loss in a row, as speculation over the timing of a Fed rate hike dominated market sentiment for most of the year. Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.
Meanwhile, silver futures for March delivery inched up 4.5 cents, or 0.33%, to trade at $13.81 a troy ounce. Prices slumped to $13.62 on Monday, a level not seen since August 2009.
Elsewhere in metals trading, copper prices held near the prior session's one-week low on Wednesday, as traders awaited the outcome of the all-important Fed meeting.
A day earlier, prices tumbled 5.5 cents, or 2.6%, after mining giant Rio Tinto (L:RIO) said they secured $4.4 billion in financing to expand its Oyu Tolgoi copper mine in Mongolia. When fully operational, the mine can produce an average of 430,000 metric tons of copper, or roughly 2% of global supply.