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Gold rose on Wednesday as Russian President Vladimir Putin's move to mobilize more troops over the conflict in Ukraine drew investors to the safe-haven asset, offsetting pressure from a firmer dollar and expected U.S. rate hikes.

Spot gold rose 0.7% to $1,674.19 per ounce by 1348 GMT. U.S. gold futures also climbed 0.7% to $1,682.50.

"A portion of the reason (for gold's gains) were some comments by Russian President Putin in regards to escalating the conflict in Ukraine ... that's clearly a supportive factor," said David Meger, director of metals trading at High Ridge Futures.

Putin on Wednesday called up 300,000 reservists to fight in Ukraine and said Moscow would respond with the might of all its vast arsenal if the West pursued its "nuclear blackmail".

"In recent months gold had tended not to see much, if any, safe-haven demand on global concerns ... precious metals traders apparently reckon Putin's threats are a big deal," Jim Wyckoff, senior analyst at Kitco Metals, said in a note.

Bullion, however, faced headwinds from the dollar which jumped to a new two-decade high, making gold more expensive for overseas buyers, with elevated Treasury yields adding further pressure. [USD/][US/]

Spotlight is now on the Fed's policy decision due at 2 p.m. EDT (1800 GMT), with the Fed widely expected to hike interest rates by 75 basis points, followed by Fed Chair Jerome Powell's news conference.

"If the market were to get that 75 basis point rate hike, there is the potential that the bulk of that is already been factored into the market and hence you could see a bit of a relief rally," Meger said.

Gold is considered a hedge against inflation and geopolitical risks but rising rates increase the opportunity cost of holding non-yielding bullion.

Spot silver jumped 1% to $19.4942 per ounce, while platinum fell 0.4% to $918.22.

Palladium rose 0.6% to $2,181.01.