Investing.com - Gold rallied on Wednesday, as market players looked ahead to the outcome of the all-important Federal Reserve meeting later in the session.
Gold for February delivery on the Comex division of the New York Mercantile Exchange jumped $11.80, or 1.1%, to trade at $1,073.30 a troy ounce during U.S. morning hours. A day earlier, gold dipped $1.80, or 0.17%.
The Fed is widely expected to raise rates by 25 basis points at the conclusion of its policy meeting at 2:00PM ET on Wednesday. The central bank will also release its latest forecasts for economic growth and interest rates.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement.
With a rate hike already mostly priced in, market players are now focusing on how quickly the Fed will tighten monetary policy in 2016.
Many in the market anticipate the pace of increases to be gradual amid concerns over tepid growth overseas and divergent monetary policies between the U.S. and other nations.
The yellow metal is on track to post an annual decline of 10% in 2015, the third yearly loss in a row, as speculation over the timing of a Fed rate hike dominated market sentiment for most of the year.
Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.