Gold dropped below $1200 an ounce in Asian trade on
Wednesday ahead of the outcome of the U.S. Federal Reserve's last policy
meeting of the year, when it may signal how soon it will raise interest rates.
Investors were also keeping an eye on Russia after
the rouble plunged more than 11 percent against the dollar on Tuesday despite a
hefty interest rate hike by the country's central bank.
Spot gold was nearly flat at $1,197.20 an ounce by
0300 GMT after a volatile session on Tuesday that pulled it to a one-week low
of $1,188.41, before ending marginally higher. U.S. gold for February delivery
was seen at $1,198 an ounce on the same time.
Investors will be watching whether the Federal Open
Market Committee will remove the phrase "considerable time" in the
statement it will release at 1900 GMT with regard to the timing of an interest
rate hike.
Dropping that phrase would mean the Fed is preparing
the market for a rate hike next year as the U.S. economy gathers strength,
analysts say, which could weaken prices of non-interest bearing assets such as
gold.
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