Gold ended modestly higher on Tuesday ahead the Federal Reserve's policy announcement, remaining near an eight-month low, with investors unwilling to place big bets as they awaited clues on the timing of the first U.S. rate rise in eight years.
The Fed will began its two-day meeting earlier, with an announcement scheduled for Wednesday. Some analysts believe the Fed could signal it may begin raising rates sooner than mid-2015, the current consensus target.
Any increase in interest rates would dim the appeal of non-interest-bearing assets such as gold.
U.S. gold futures settled $1.60 higher at $1,236.70 an ounce.
Spot gold was last up 0.3 percent to $1,236 an ounce. The metal posted its biggest weekly fall since late May last week on a stronger dollar and fell to its lowest since January at $1,225.30 on Monday before recovering.