By Swati Verma
BENGALURU (Reuters) - Gold rose for a second straight session on Tuesday as equities wavered ahead of a two-day U.S. Federal Reserve meeting in which interest rates are mostly expected to remain unchanged.
Spot gold was up 0.2 percent at $1,315.77 an ounce by 0638 GMT, and U.S. gold futures rose 0.1 percent at $1,319.1 an ounce.
Asian shares edged lower on Tuesday as investors nervously awaited the outcomes of both the U.S. central bank and Bank of Japan policy meetings this week.
A range of mixed economic figures and conflicting remarks by key Fed policymakers have kept investors guessing over the timing of the next U.S. rate hike.
Recent weak U.S. data has boosted bets the Fed will skip raising rates this month, but investors will listen closely to Chair Janet Yellen's speech on Wednesday for any hint the bank could hike rates before the end of the year.
More From This Section
"Even if there is an interest rate hike in September, the selling pressure in gold will be diluted," said Mark To, head of research at Hong Kong's Wing Fung Financial Group, because investors have already factored that into their risk scenarios.
Rising U.S. interest rates typically increase the opportunity cost of holding non-yielding bullion and boost the dollar, which makes it more expensive to buy gold for those holding other currencies.
Spot gold looks neutral in a range of $1,313-$1,319 per ounce, and an escape could point a direction, according to Reuters technical analyst Wang Tao.
"Everyone is waiting for the Fed's decision tomorrow and it is extremely hard to guess this time," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
"However, whenever the prices are touching below $1,310, there is strong interest to buy gold."
Japan's central bank also meets on Tuesday and Wednesday, and could make negative interest rates the primary focus of its monetary policy, moving away from quantitative easing.
"We suspect that the wait and hold pattern of the last few days will continue over into tomorrow's Bank of Japan meeting and do not expect too much in terms of price action for gold today," said Alex Thorndike, senior precious metals dealer at MKS PAMP Group.
Among other precious metals, spot silver rose 0.1 percent to $19.16 an ounce. The metal was up nearly 2 percent in the previous session.
Platinum gained 0.4 percent to $1,024.85 per ounce. Palladium rose 0.4 percent to $685.50, after rising as much as 2 percent in the prior session.
(Reporting by Swati Verma and Nallur Sethuraman in Bengaluru; Editing by Ed Davies and Tom Hogue)