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Gold prices were stuck in a tight range on Wednesday as traders prepared for a key policy decision from the U.S. Federal Reserve and remarks from Fed Chair Jerome Powell later in the day, which could shed more light on prospects of rate cuts this year.

Spot gold was steady at $2,158.29 per ounce, as of 0319 GMT. U.S. gold futures edged 0.1% higher to $2,161.60.

Market focus will be on the Federal Open Market Committee's policy statement due at 1800 GMT and Powell's press conference at 1830 GMT.

With the U.S. central bank expected to hold rates steady, traders are awaiting its economic and interest rate projections for the rest of the year.

"There's a real chance that the Fed may not be as dovish as traders want to hear, and that the median dot plot could be revised from three to two, or even one Fed cut this year," City Index senior analyst Matt Simpson said.

"And that could trigger a shakeout at these highs for gold and see it break below $2,050 if Powell disappoints doves. Yet, gold remains supported by a broad rise in commodities in general."

Last week's U.S. consumer prices index and producer price index figures came in hotter than expected, reducing hopes for early rate cuts.

Traders are currently pricing in an about 61% chance of a rate cut in June, according to the CME FedWatch Tool.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

The dollar held steady after hitting a more than two-week high in the previous session. A stronger dollar makes gold more expensive for other currency holders. [USD/]

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.48% to 837.35 tons on Tuesday from 833.32 tons in the prior session. [GOL/ETF]

Spot silver gained 0.2% to $24.95 per ounce, platinum was flat at $894.20 and palladium rose 0.2% to $991.50.