Gold held around $1,865 an ounce on Wednesday, hovering near 2-½-month lows and remaining under pressure ahead of a key monetary policy decision from the US Federal Reserve. The Fed is widely expected to hike rates by a hefty 50 basis points and announce plans to reduce its $9 trillion balance sheet when it concludes its two-day meeting later today.
While a half-percentage point rate increase has largely been priced in by markets, investors will be watching for an even more hawkish bias from the central bank. Bets on more aggressive Fed tightening kept the dollar close to a 20-year high and the benchmark US 10-year yield near the psychologically important level of 3%, putting downward pressure on bullion prices.