Gold ticked higher on Wednesday as caution set in ahead of the US Federal Reserve's two-day monetary policy meeting outcome that is expected to shed more light interest rates and economic projections.

Spot gold was up 0.2% at $1,734.79 per ounce by 1013 GMT, having touched a more than two-week high of $1,740.90 on Tuesday. US gold futures rose 0.2% to $1,734.70.

"The Fed is expected to maintain the dovish tone. At the previous meetings some expected a first rate hike in 2022 and some expected in 2023, so it would be interesting if the dot plot changes," said Xiao Fu, head of commodities markets strategy at Bank of China International.

The economic projections and policy statement from the Fed are scheduled to be released at 1800 GMT, followed by a news conference from Fed Chair Jerome Powell.

"Markets are concerned about inflation prospects but the Fed is less so. The biggest headwind for gold right now is rising Treasury yields, but global central banks are still on easing bias which means that gold prices wont fall too low."

Following solid gains in 2020, gold prices have came under pressure this year as recent spike in benchmark 10-year US Treasury yields has weighed on the non-yielding commodity.

Meanwhile, the US dollar firmed, supported by elevated US yields on expectations of a swift economic recovery after a $1.9 trillion recovery package was signed into a law last week.

"From a technical point of view, a clear climb above $1,740 would open space for further gains, while a decline below the $1,700 mark will show weakness," ActivTrades chief analyst Carlo Alberto De Casa said in a note.

Elsewhere, silver edged 0.1% higher to $25.99 an ounce. Palladium fell 0.5% to $2,485.22, having hit a one-year high of $2,520.31 on Tuesday, and platinum slipped 0.5% to $1,206.39.