By Manolo Serapio Jr
MANILA (Reuters) - Gold stayed near a 12-week peak on Wednesday, supported by a softer dollar as investors awaited the outcome of the Federal Reserve's first policy meeting of the year.
The U.S. central bank is widely expected to keep key rates unchanged at the conclusion of its two-day meet later in the day, mindful of global economic headwinds from China to Europe.
Expectations for a rate increase at the Fed's next meeting in March are also receding, which should boost the price of non-interest bearing gold.
"The world's economic condition doesn't seem to give the Fed reason to hike rates soon given the growth risks," said Barnabas Gan, analyst at OCBC Bank in Singapore.
Spot gold was flat at $1,120.51 an ounce by 0310 GMT. It touched $1,122.90 on Tuesday, its strongest since Nov. 3.
With risk aversion intact as concerns over global growth persist, "I won't be surprised if gold hits $1,150, even $1,200 in the first quarter", said Gan.
Gold's safe-haven appeal is back in vogue this year amid falling equities and oil prices, lifting spot bullion nearly 6 percent so far this month. Gold dropped 10.4 percent in 2015.
U.S. gold for February delivery was little changed at $1,121.20 per ounce.
The dollar was lower versus a basket of currencies as investors looked to the Fed's statement due out at 1900 GMT. Asian stocks struggled to hold early gains. [MKTS/GLOB]
Reflecting rising confidence in gold, holdings of SPDR Gold Trust, the word's largest gold-backed exchange-traded fund, stood at 21.52 million ounces on Tuesday, the highest since Nov. 5.
China's net gold imports for December via main conduit Hong Kong surged to the highest in more than two years, data showed on Tuesday, as investors lost faith in collapsing stock markets and a weakening currency.
"China has taken advantage of low gold prices and an equity market rout to stock up on gold assets," said Helen Lau, analyst at Argonaut Securities.
Lau expects China's gold imports to remain strong due to a seasonal demand surge ahead of the Lunar New Year holiday in February.
Other precious metals were also little changed. Spot silver was at $14.50 an ounce, palladium at $492.56 and platinum at $872.64.
(Reporting by Manolo Serapio Jr.; Editing by Himani Sarkar)
