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Gold prices edged lower on Wednesday due to an uptick in the dollar, although bullion traded in a narrow range as investors stayed on the sidelines awaiting more cues on the U.S. Federal Reserve policy.

Spot gold was down 0.1% at $2,176.29 per ounce, as of 0310 GMT. U.S. gold futures also edged 0.1% lower to $2,175.20.

The dollar index strengthened 0.2% against its rivals, making gold more expensive for other currency holders. [USD/]

Gold prices have risen more than 5% so far this year and hit a record high last week, helped by increasing bets for Fed easing, persistent safe-haven demand and central bank purchases amid geopolitical tensions.

"It's difficult to construct an overly bearish case for gold prices with the current backdrop of geopolitics and potential central easing," City Index senior analyst Matt Simpson said.

The U.S. central bank left its funds rate on hold between 5.25% and 5.5% last week and retained projections for three cuts by the year-end.

Chicago Fed President Austan Goolsbee said on Monday that he pencilled in three rate cuts for this year at the Fed's policy meeting.

Investors now look forward to U.S. core personal consumption expenditure price index data due on Friday to gauge when the Fed may begin cutting interest rates.

Traders are pricing in a 72% probability that the Fed will begin cutting rates in June, according to the CME Group's FedWatch Tool. Lower interest rates reduce the opportunity cost of holding bullion.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.62% to 830.15 tons on Tuesday. [GOL/ETF]

"Aligned with the supported yet more sideways price action, open interest figures show that most of the early March inflows into gold have so far stuck," JP Morgan said in a note.

Spot silver was steady at $24.42 per ounce, platinum eased 0.1% to $902.15 and palladium fell 0.6% to $988.15.