Gold steady as investors weigh Mideast risks ahead of Fed decision

Gold prices held steady on Wednesday as investors kept to the sidelines, evaluating the economic impact of the Middle East conflict ahead of the U.S. Federal Reserve's policy decision.

FUNDAMENTALS

* Spot gold was little changed at $5,003.77 per ounce as of 0058 GMT. U.S. gold futures for April delivery held steady at $5,008.70.


* Oil ‌prices stayed ⁠above $100 ⁠a barrel, as renewed Iranian attacks on the United Arab Emirates deepened fears over the global supply outlook.

* Israel's killing of Ali Larijani, Iran's security chief and the most senior figure targeted since the first day of the U.S.-Israeli war, further escalated tensions. A senior Iranian official said the country's new supreme leader had rejected de-escalation proposals passed ⁠on by ‌intermediary nations.

* U.S. President Donald Trump said Washington is not ready to leave its military operation in Iran yet, ⁠but added, "We'll be leaving in pretty much the very near future."

* The Strait of Hormuz, a conduit for a fifth of the world's oil shipments, remains largely shut, with Iran threatening to attack tankers linked to the U.S. and Israel.

* The Strait's closure kept crude elevated, adding to inflationary pressures by pushing up transport and manufacturing costs. The inflation backdrop typically ‌supports gold as a hedge, but high interest rates dull the metal's appeal by boosting returns on yield-bearing assets.

* The Fed is widely expected ⁠to hold rates steady for a second straight meeting when it announces its policy decision later in the day.

* Central banks in the UK, euro zone, Japan, Canada, Switzerland and Sweden willalso meet this week in their first sessions since the start of the Iran war.

* Spot silver rose 0.2% to $79.46 per ounce. Spot platinum was steady at $2,124, while palladium lost 0.2% to $1,598.84.

DATA/EVENTS (GMT)

1230 US PPI Machine Manuf'ing Feb

1400 US Factory Orders MM Jan.