* U.S. Fed decision due at 1800 GMT * U.S. dollar gains for fourth session * Climb above $1,740/oz opens space for more gains - analyst (Recasts, adds comments, updates prices) By Brijesh Patel March 17 (Reuters) - Gold prices edged lower on Wednesday due to a rise in U.S. bond yields and a stronger dollar, but the metal traded in a narrow range as markets awaited the outcome of the Federal Reserve's two-day monetary policy meeting later in the day. Spot gold was down 0.1% at $1,729.54 per ounce by 1157 GMT, having hit a two-week high in the previous session. U.S. gold futures eased 0.2% to $1,726.70. Benchmark U.S. Treasury yields rose to a new 13-month high, increasing the opportunity cost of holding gold, while the dollar index gained for a fourth straight session. "Markets are concerned about inflation prospects, but the Fed is less so. The biggest headwind for gold right now is rising Treasury yields," said Xiao Fu, head of commodities markets strategy at Bank of China International. "But global central banks are still on an easing bias, which means that gold prices won't fall too low." All eyes are on the economic projections and policy statement from the Fed scheduled for release at 1800 GMT, followed by a news conference from Fed Chair Jerome Powell. "While no change in U.S. monetary policy is expected at this week's meeting, traders will be closely scrutinizing the Fed's wording and Powell's comments regarding U.S. and global economic growth and inflation prospects," said Kitco Metals senior analyst Jim Wyckoff in a note. Following solid gains in 2020, gold prices have come under pressure this year as a recent spike in benchmark 10-year U.S. Treasury yields weighed on the non-yielding commodity. "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. Silver fell 0.5% to $25.84 an ounce. Palladium fell 0.8% to $2,479.47, having hit a one-year high of $2,520.31 on Tuesday, and platinum dropped 1.6% to $1,192.47. (Reporting by Brijesh Patel in Bengaluru; Editing by David Evans and Jan Harvey)
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