LONDON/ROTTERDAM: Gold prices slipped in European trade on Wednesday as the dollar climbed, with investors’ looking forward to a US Federal Reserve policy statement for clues on approach to monetary policy the central bank is likely to adopt.

Spot gold fell 0.6% to $1,838.50 per ounce by 1218 GMT. US gold futures eased 0.7% to $1,838.00.

“To drive gold towards the upper end of the (narrow) range, (the Fed) will need to adopt a fairly dovish tone, which will push US 10-year yields back below 1% - that will help gold,” said Michael Hewson, chief market analyst at CMC Markets UK.

The US central bank is expected to reinforce its commitment to accommodative monetary policy to aid the virus-hit economy in its decision due at 1900 GMT.

Easy monetary policy adds pressure on government bond yields and benefits non-yielding gold.

Meanwhile, US President Joe Biden’s $1.9 trillion stimulus plan has been met with objections from Republicans over the price tag.

“The $1.9 trillion is not going to be there and it won’t come much before March, so the market may have to get used to the idea of a lower amount at a later point in time,” added CMC’s Hewson.

US stimulus plan doubts also weighed on US Treasury yields, while the dollar rebounded and was on track for its best day in nearly two weeks.

Gold will trade between $1,810 and $1,870 in the near term, said DailyFX strategist Margaret Yang, adding that in the medium term, the economic recovery might push yields higher along with inflation, which would be bearish for bullion. Silver dropped 1.3% to $25.11 an ounce, while platinum shed 1.9% to $1,076.96. Palladium fell 0.5% to $2,313.16, sliding for a fifth straight session having hit its lowest since Dec. 21 at $2,294.64 earlier in the session.