"We believe any decision to raise rates in 2016 will ultimately be viewed as a misstep that increases financial and economic risks, and this will be to gold's benefit," said Joe Foster, portfolio manager and strategist of VanEck International Investors Gold Fund in New York.
"In the meantime, however, the anticipation of a rate increase and any attendant U.S. dollar strength could cause gold to struggle," he added.
UBS Wealth Management Research said in a note that it held its three-month price range at $1,275-$1,425 an ounce, but raised its six- and 12-month forecasts to $1,350.
"Gold is open to setbacks in the short term, given the elevated long speculative positioning and pessimistic rates markets," UBS said.
Technically, initial resistance comes in around $1,330, near the 21-day moving average.
"Gold is approaching the important $1,300-$1,310 support zone, which has held incredibly well since the Brexit rally and will be a key focus for traders in the short term," said Alex Thorndike, senior precious metals dealer at MKS PAMP Group.
Spot silver was up 0.46 percent at $18.94 an ounce.
Platinum gained 0.34 percent at $1,035.70. It fell more than 2 percent to touch an over 2-month low to $1,026.10 on Tuesday. Palladium rose 0.3 percent at $653.47 and compares with an 8-week low of $648.72 on Tuesday.