Gold inches up ahead of Fed policy statement

LONDON: Gold inched higher in range-bound trade on Wednesday as the dollar wavered, with investors cautious ahead of the outcome of a two-day Federal Reserve meeting in the United States.
Spot gold        had risen 0.2 percent to $1,313.50 an ounce by 0612 GMT.
U.S. gold futures         for December delivery were up 0.5 percent at $1,317.40 an ounce. 
"Donald Trump's comments overnight in regards to North Korea have certainly added a bid to the precious complex, but all in all very quiet ahead of the (Fed statement)," a Sydney-based trader said, adding that the dollar was providing some support. 
U.S. President Donald Trump escalated his standoff with North Korea over its nuclear challenge on Tuesday, threatening to "totally destroy" the country and mocking its leader, Kim Jong Un, as a "rocket man".              
Geopolitical risks tend to boost demand for safe-haven assets such as gold and the Japanese yen. 
The dollar edged lower against a basket of currencies        and the yen        on Wednesday. Asian stocks were little changed ahead of the Fed's monetary policy announcement later in the day.                    
The U.S. Fed is expected to announce its balance sheet reduction plans and provide an outlook for interest rate hikes for the rest of the year.                      
"We suspect that the central bank will reiterate its dovish stance and likely weaken the dollar in the process," INTL FCStone analyst Edward Meir said in a note. 
"We could see a modest bounce in gold over the next day or two, but nothing that will take the precious metal outside of a relatively tight trading range for the time being," Meir said.      A stronger dollar makes greenback-dominated bullion more expensive for those holding other currencies. Higher interest rates lead to higher bond yields and dampen demand for non-interest bearing gold. 
"The majority of the consensus is there will be one more hike this year, and if that remains the case, gold should still remain reasonably well supported with what's happening geopolitically," the trader said. 
"I think $1,300, $1,290 is certainly a good base for gold unless the Fed changes its wording with regards to how many hikes there will be in the coming months," the trader said.     
Spot gold is still targeting $1,299 per ounce, said Reuters technicals analyst Wang Tao.              
Meanwhile, silver        edged 0.1-percent lower to $17.30 an ounce.
Platinum        rose 0.7 percent to $954.60 an ounce, after hitting its lowest since early August in the previous session.  Palladium        gained 0.7 pct to $914.75 an ounce, having dropped to its lowest since mid-August on Tuesday.