Gold edged lower on Wednesday as cautious investors awaited a Federal Reserve statement that could give clues to the timing of a US interest rate increase. Spot gold was down 0.3 percent at $1,178.24 an ounce by 1417 GMT. Platinum fell to its lowest since April 2009 at $1,067.50 an ounce amid a deterioration in investor sentiment, mostly in the euro zone, caused by the stand-off between Greece and its creditors, which both impact industrial demand for the metal, ABN Amro analyst Georgette Boele said.
It was trading at the cheapest to gold since 2012, with a discount of more than $100 to the yellow metal. All eyes will be on the Fed's statement due at 1800 GMT after its two-day policy meeting. This will be followed by Fed Chair Janet Yellen's news conference half an hour later.
Analysts expect her to focus on signs the economy is recovering after a bumpy start to the year and will scrutinise her comments for pointers to the timing of the first US rate rise in nearly a decade. Expectations for an interest rate hike this year and a stronger dollar have weighed on the price of gold over the past few months, as this would increase the opportunity cost of holding the non-interest-bearing asset. "The Fed policy move will be the trigger for gold prices to fall towards $1,125 or just below that before the end of the year," Deutsche Bank analyst Michael Lewis said.
Gold was depressed by steadier 10-year US benchmark bond yields, in spite of a slightly lower dollar, down 0.2 percent versus a basket of main currencies. Markets also monitored the protracted Greek crisis, where relations between Athens and its creditors have become increasingly acrimonious, leaving little hope that a meeting of EU finance ministers on Thursday will make any progress.
"The fears on Greece have not done anything for gold, probably because it is viewed as Greece is ring-fenced and spillover effects are maybe perceived as slightly less likely than in the past," Deutsche Bank's Lewis said. Gold is typically seen as a good bet in times of financial and economic uncertainty, but bids have failed to emerge in a robust way as market focus has shifted towards signs of strength in the US economy and the timing of a rate rise, traders said. The metal's technical picture was bearish, leaving prices vulnerable to a break towards a low near $1,160 reached last month, ScotiaMocatta said. Silver was unchanged at $16.03 an ounce, while palladium fell 0.7 percent to $728.50 an ounce.