Gold prices fell to a more than one-week low on Wednesday, pressured by concerns over the U.S. stimulus bill and strength in the dollar after the Federal Reserve left interest rates unchanged.
Spot gold fell 0.36% to $1,844.61 per ounce, having earlier touched its lowest since Jan. 18. U.S. gold futures settled down 0.6% at $1,844.90.
The dollar rebounded to a more than one-week high against rivals, making gold costlier for investors holding other currencies.
"The $1.9 trillion (U.S. stimulus) was pretty ambitious and I don't think (President) Biden has the support to pass it," Haberkorn added. "That is another reason why gold is not trying to get back above $1,900." The Biden administration's stimulus plan faced strong opposition from Republicans over the size of the package.
Consistent with market expectations, the policymaking Federal Open Market Committee said Wednesday it was keeping its benchmark short-term borrowing rate anchored near zero and maintaining an asset purchasing program that is seeing the Fed buy at least $120 billion a month.
"To drive gold towards the upper end of the (narrow) range, (the Fed) will need to adopt a fairly dovish tone, which will push U.S. 10-year yields back below 1% - that will help gold," CMC Markets UK's chief market analyst Michael Hewson said.
Easy monetary policy tends to weigh on government bond yields, increasing the appeal of non-yielding gold.
Silver fell 0.4% to $25.35 an ounce. Platinum shed 2.3% to $1,072.57, having touched its lowest since Jan. 12 at $1,056.70.
Palladium fell 0.9% to $2,304.39 per ounce, having fallen to its lowest since Dec. 21 at $2,292.90 earlier in the session.