Spot gold was down 0.3% at $1,862.48 an ounce, 0217 GMT. US gold futures were down 0.4% at $182.40.
Benchmark 10-year U.S. Treasury yields firmed after falling from the key 3% mark in the prior session, ahead of a widely expected significant interest rate hike from the Fed, which is trying to contain runaway inflation in the United States.
While gold is seen as a hedge against inflation, rising US short-term interest rates and bond yields tend to increase the opportunity cost of holding zero-yielding bullion.
The US central bank’s Federal Open Market Committee is due to issue a policy statement at 1800 GMT, followed by a press conference by Fed Chairman Jerome Powell.
The market is expecting a decision on the benchmark overnight interest rate hike and details on the $8.9 trillion Fed balance sheet reduction.
“A 50 basis point rise is now expected by the markets….If the statement has an even more hawkish bias, then gold is likely to come under further pressure,” said Jeffrey Halley, principal analyst at OANDA. .
“If the statement remains essentially unchanged in direction, then a near-term recovery towards $1,880 is possible as the US Dollar is likely to decline.”
The dollar has remained near 20-year highs, making greenback-priced gold less attractive to overseas buyers.
Russian forces shelled targets in eastern Ukraine on Tuesday, even as the European Union prepared to impose oil sanctions on Moscow.
Bullion is considered a safe store of value in times of economic and political crisis.
Spot silver fell 0.1% to $22.54 an ounce, while platinum was almost unchanged at $961.62 and palladium gained 0.2% to $2,260.28.