Gold rose on Wednesday after the Federal Reserve held interest rates steady following its two-day meeting this week and indicated that no action is likely next year amid persistently low inflation.
Gold prices rose earlier in the day on worries about a trade deal between the U.S. and China.
U.S. President Donald Trump has only days to decide whether to impose tariffs on nearly $160 billion in Chinese goods, a move that would exacerbate the 17-month long trade war.
Top economic and trade advisers from the White House are expected to meet in coming days with Trump over the decision, a source told Reuters, though a final decision has not been made.
Better than expected U.S. consumer prices in November, supported the Fed's intention not to cut interest rates again.
The European Central Bank is also expected to keep rates steady at a meeting on Thursday.
"The global economy appears to have stabilized after a year of growth uncertainty. If yields on U.S. 10 (Treasury) yields rise above 1.90%, we think that will signal the end of golds rally and push prices below $1,400/oz," analysts at OCBC bank said in a note.
Palladium rose 0.6% to $1,907.70 an ounce, scaling a fresh peak of $1,911.50, on concerns that stagnating supply of the autocatalyst metal may fail to meet demand.
Adding fuel to supply concerns, prices zoomed past the key $1,900 level on Tuesday after mines across South Africa began shutting down after flash flooding triggered the most severe power blackouts in more than a decade.
Palladium was on track for a 14th straight session of gains.
Platinum jumped 0.8% on Wednesday, having hit a one-month high of $930.
South Africa is a major producer of palladium and also has the biggest and most lucrative platinum reserves.
Meanwhile, spot silver inched 0.1% higher to $16.67 an ounce.