* SPDR Gold ETF holdings dropped 0.9 tonnes on Tuesday
* Fed’s policy statement due at 1800 GMT (Adds comment, updates prices)
Sept 22 (Reuters) - Gold inched higher on Wednesday ahead of the outcome of the U.S. Federal Reserve’s policy meeting where it could give clues about the timeline to reduce stimulus in the world’s largest economy.
Spot gold rose 0.3% to $1,779.48 per ounce by 0634 GMT, while U.S. gold futures rose 0.1% to $1,779.80.
In the absence of an official taper signal, gold could get some relief for the near term, DailyFX Currency Strategist Ilya Spivak said, adding that the downtrend for the month would hold.
Fed’s two-day meeting will conclude later on Wednesday.
However, Michael Langford, director at corporate advisory AirGuide, expects the Fed to be more cautious in reducing stimulus, referring to an OECD report which argued that it was too early for governments and central banks to withdraw economic support.
“Confirmation from the Fed in not reducing monetary support resulting in a weakening dollar, could help gold settle higher at $1,800.”
Wednesday’s statement will also offer Fed’s interest-rate projections for 2024 for the first time.
“If it looks like over the course of the coming years, basically through the end of 2024, the Fed envisions more than 100 basis points in cumulative rate hikes, that would be hawkish, and a negative catalyst for gold,” Spivak said.
An eventual interest-rate hike would raise the opportunity cost of holding the non-interest bearing gold.
Traders also eyed developments around China’s debt-laden property developer Evergrande, after it said it would pay some bond interest due on Thursday, providing some relief for stocks.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.1% to 1,000.79 tonnes on Tuesday.
Silver climbed 1.7% to $22.85 per ounce, while palladium gained 1.5% to $1,935.28.
Platinum rose 0.7% to $959.99. Prices rose 4.7% on Tuesday, its biggest one-day gain since Feb. 10. (Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips, Rashmi Aich and Uttaresh.V)
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