PRECIOUS-Gold firmer but price restrained ahead of Fed outcome

* Gold market players look to U.S. Fed decision

* Ultra-loose monetary policies to keep lending support

* Euro hits 14-month high versus dollar

* Asia physical gold buying slows

(Updates throughout, changes dateline from SINGAPORE)

London, Jan 30 (Reuters) - Gold firmed on Wednesday, but prices were hemmed in by the upcoming U.S. Federal Reserve's monetary policy decision and cautiously optimistic economic sentiment.

The central bank is expected to confirm in a statement at 1915 GMT that it will stick with its monthly bond-buying programme until unemployment rates drop significantly, a stance that should benefit bullion.

Spot gold gained just 0.1 percent to $1,665.44 an ounce by 1112 GMT. It rose above the key 200-day moving average in the previous session, located around $1,663.

U.S. gold futures for February delivery were up 0.3 percent at $1,665.70 an ounce.

"The Fed's decision and statement are something people are looking at quite closely," Standard Chartered analyst Dan Smith said. "The big challenge for gold is the impact a world economy recovery will have on prices."

Recent data showing signs of steady economic improvement has led some investors to shift out of risky low-yield assets or zero-yield assets like gold to equities.

Investors are also waiting for nonfarm payrolls data on Friday for a close look at the U.S. labour market. Economists surveyed by Reuters expect steady hiring from employers in January, helping unemployment to stand unchanged from a month earlier at 7.8 percent.

Gold analysts say ultra-loose monetary policies adopted by central banks in key economies will not change soon.

"Policy makers' caution towards the economy suggests that the stimulus measures are unlikely to be taken away anytime soon, which will support gold prices," Sharps Pixley said in a note.

In wider markets, the euro surged to its highest level in 14 months against the dollar, as investors welcomed stronger-than-expected euro zone economic sentiment data.

Trading was also steadier in other commodities, with metals and oil prices on the rise. Benchmark Brent crude matched a more than three-month high hit the session before.

Purchases in Asia's physical market were slow, as buyers that beefed up their inventories earlier in the month moved to the sidelines, waiting for clear direction in prices, dealers said.

Spot silver edged up 0.1 percent to $31.41.

Spot platinum rose 0.4 percent to $1,682.24, headed for a second straight session of gains. Spot palladium rose to a fresh 16-month high of $756 an ounce at one stage earlier, before settling at $752, still up 0.6 percent.

Expectations that global demand for platinum group metals from the automotive sector will pick up in line with an economic recovery kept both well supported.

"The solid, albeit moderate, pace of growth of the U.S. economy and perhaps more importantly the likelihood of a re-emerging China could support continued advances in metal values through 2013," U.S. PGMs recycler A-1 said in a report.

A-1 sees platinum prices trending between 5 percent and 10 percent higher through the first few months of the year. It expects palladium to increase around $800/$825 an ounce, supported by the loss of supplies from Russian stocks, possible further episodes of unrest in South Africa and Chinese economic recovery.

(Editing by Veronica Brown and William Hardy)