Traders around the world are looking for any hints about whether and when the Fed plans to taper its bond-buying programme as the U.S. economy bounces back from the pandemic fallout.
The two-day Fed meeting starts on Tuesday, with a final statement published after the meeting closes on Wednesday.
US gold futures gained 0.2% to $1,869.
The Fed is keen to minimize the possibility of a market disruption when it begins to reduce its $120 billion per month government bond
The U.S. currency has been buoyed as traders closed short positions before the Fed's two-day policy-setting confab, which kicks off on Tuesday
Spot gold was down 0.9% at $1,860.44 per ounce, as of 0654 GMT
Spot gold was down 0.6% at $1,864.58 per ounce, as of 0311 GMT, its lowest since June 4
Japan's Nikkei rose 0.35% while MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1%
Oil prices held near multi-year highs on Monday, underpinned by an improved outlook for demand as increased Covid-19 vaccinations help lift travel curbs
The yen was at 109.715, after weakening to 109.840 on Friday for the first time since June 4
Central bankers know how to raise benchmark interest rates, but they have less experience in calibrating the exit from quantitative easing.
Fed officials have repeatedly tamped down fears of inflation running persistently higher than its 2% target
Here are the best of Business Standard's opinion pieces for Tuesday
The year 2021 will be one of the strongest years for global growth in history
Investors will be watching US jobs data due Friday for clues to the Fed's plans for policy in the coming weeks and months
Some of the factors fueling current strong growth, including fiscal spending and the rush by households to take advantage of a broader economic reopening, are likely to fade over time, Brainard noted
Even though the offering rate on the Fed facility is 0 per cent, demand has been increasing as a flood of cash overwhelms U.S. dollar funding markets
Signs of inflation would "prove to be largely transitory," Fed Vice Chair Richard Clarida said in a Yahoo! Finance interview
Spot gold was up 0.2% to $1,885.47 per ounce by 0724 GMT, after falling as much as 0.5% earlier in the session
Sentiment in Europe was also underpinned by the latest IFO indicator which showed that the upswing for the German economy