NEW YORK: Gold prices stalled on Wednesday as caution ahead of the US Federal Reserve’s policy decision due later in the day held investors back from making large bets.

Spot gold was flat at $1,810.33 per ounce, as of 1656 GMT. US gold futures fell 0.2% to $1,822.10.

“Today’s small drop is simply profit-taking after that rally, ahead of a question mark which is the Fed this afternoon,” said David Meger, director of metals trading at High Ridge Futures.

Gold prices had jumped over the key $1,800 per ounce level in the previous session to their highest in more than five months after data showed a smaller-than-expected rise in US consumer prices.

The Fed’s decision is scheduled at 2 p.m. ET (1900 GMT), followed by a press conference from Fed Chair Jerome Powell. The US central bank is widely expected to increase rates by 50 basis points.

“Any dovish comment coming from policy makers could give new fuel to gold’s recovery,” Carlo Alberto De Casa, external analyst at Kinesis Money, said in a note.

“Vice versa, hawkish rhetoric could determine a consolidation phase or some moderate correction, even if the main trend still appears positive.” Lower rates tend to boost gold prices because they cut the opportunity cost of holding non-yielding bullion.

“The market is more focused on the end game or the idea that the Fed will be ending its interest rate hike cycle early in 2023.