(Reuters) - Gold moved in a narrow range on Wednesday as cautious investors awaited the U.S. Federal Reserve’s decision on interest rates later in the day while weak equities lent support.
Spot gold XAU= was up 0.1% at $1,489.05 an ounce at 0750 GMT. U.S. gold futures GCcv1 were up 0.1% at $1,491.40.
“We seem to be at a bit of an equilibrium around here, stuck between $1,480 and $1,520. If the Fed is more dovish in their outlook, it could be enough to drive gold higher,” said OANDA analyst Jeffrey Halley.
Investors expect the U.S. central bank to lower interest rates by a quarter of a percentage point for a third time this year, according to CME Group’s FedWatch tool.
However, only about a 30% chance of another cut in December has been priced in, compared with about 70% earlier this month.
Muted movement in Asian equities on Wednesday also aided gold, with MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 0.16% from Tuesday’s three-month high on reports that an interim U.S.-China trade agreement might be delayed.
The more than 15-month trade spat between the world’s two largest economies has roiled financial markets around the globe, making them sensitive to the slightest development negotiations.
“The market is very range-bound with the FOMC (meeting outcome) around the corner,” said Nicholas Frappell, global general manager at ABC Bullion, adding that the potential delay in a Sino-U.S. trade agreement is supporting gold and is expected to do so for some time.
Fears of a possible global recession and economic slowdown has lent support to bullion. Data released on Tuesday showed that U.S. consumer confidence fell for a third straight month in October.
Across the Atlantic, Britain is set to hold a December election after Prime Minister Boris Johnson won approval from parliament on Tuesday for an early ballot aimed at breaking the Brexit deadlock.
Spot gold could test a support at $1,480 an ounce, with a good chance of breaking below this level and falling to the Oct. 1 low of $1,458.50, Reuters technical analyst Wang Tao said.
Other precious metals were subdued, with silver XAG= steady at $17.80 an ounce while platinum XPT= dipped 0.4% to $916.78 and palladium XPD= firmed by 0.4% to $1,788.52.
Reporting by Karthika Suresh Namboothiri and Eileen Soreng in Bengaluru; Editing by Aditya Soni and David Goodman