- FOMC's two-day meeting scheduled on Dec. 14-15
- Asian stocks, oil slip on Omicron variant fears
Dec 14 (Reuters) - Gold prices held steady on Tuesday, caught between lower bond yields and a stronger dollar, as investors watched for signs of how soon the U.S. central bank could wind down pandemic support measures when it meets later in the day.
Spot gold was almost unchanged at $1,787.50 per ounce by 0616 GMT. U.S. gold futures were nearly flat at $1,787.90.
"The market is largely waiting for the outcome of the Fed meeting," said DailyFX currency strategist Ilya Spivak, adding, the metal was stuck in a narrow range due to two conflicting factors - lower bond yields and a stronger dollar.
The dollar firmed, making bullion more expensive for buyers holding other currencies, while U.S. Treasury yields hovered near a one-week trough touched in the previous session.
The U.S. Federal Reserve shall begin its two-day monetary policy meeting later in the day, and it is expected to announce wrapping up its bond buying stimulus sooner than previously communicated, potentially setting up earlier interest rate hikes next year.
Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of holding bullion, which bears no interest.
"The real question is, are we going to get a clear-cut hawkish signal? If it's not as hawkish as the markets have already baked in, we might get a bit of a pop in gold, but the path of least resistance still favours weakness," Spivak said.
The European Central Bank, the Bank of England and the Bank of Japan are also scheduled to meet this week.
Asian stocks and oil prices slipped, as fears over the Omicron coronavirus variant weighed on investor sentiment.
Spot silver dipped 0.3% to $22.24 an ounce. Platinum was up 0.3% to $932.76, and palladium gained 0.4% to $1,688.09.
Reporting by Bharat Govind Gautam in Bengaluru; Editing by Rashmi Aich