Investing.com - Gold prices inched lower during North American morning hours on Wednesday, falling below the $1,200-level as investors prepared for a rate hike by the Federal Reserve while awaiting what Chair Janet Yellen says about the future path of interest rates.
Comex gold futures shed $2.65, or around 0.2%, to $1,199.55 a troy ounce by 9:05AM ET (13:05GMT), not far from last Friday's low of $1,194.50, which was the weakest level since January 31.
Meanwhile, spot gold was up $2.20 at $1,200.50 per ounce.
The Fed is widely expected to raise the fed funds target range by a quarter point at the conclusion of its policy meeting at 2:00PM ET (18:00GMT) on Wednesday, which would put it in a range between 0.75%-1%.
The U.S. central bank will also release its latest forecasts for economic growth and interest rates, known as the "dot-plot".
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, as investors look for any hawkish change in tone about the economy or future rate hikes.
Fed officials previously projected three rate hikes in 2017, but that might move up to four, amid signs of a recent uptick in inflation and continued strength in the jobs market.
Ahead of the Fed's decision, reports showed that U.S. inflation posted the smallest increase since last summer, while retail sales recorded their smallest gain in six months in February.
Meanwhile, investors were focusing on political risks in Europe. Wednesday's Dutch election is being watched as a bellwether for the spread of populism in Europe, particularly ahead of next month's French election.
Opinion polls have suggested that Dutch nationalist Geert Wilders' right-wing Freedom Party, which wants to take the Netherlands out of the European Union and stop Muslim immigration, has lost its lead to more mainstream opponents.
However, a diplomatic standoff with Turkey was seen influencing voting in Wilders' favor, prompting investors to remain weary over the possibility of a Brexit or Trump-style shock result.
The first exit polls are expected at 20:00GMT (4PM ET).
Also on the Comex, silver futures for May delivery held steady at $16.92 a troy ounce.
Meanwhile, platinum declined 0.1% to $938.35, while palladium added 0.4% to $744.98 an ounce.
Elsewhere in metals trading, copper futures tacked on 2.6 cents, or 1%, to $2.661 a pound.