SINGAPORE, March 16 (Reuters) - Gold edged higher on Wednesday, recovering from its lowest in nearly two weeks although gains were capped as investors waited for the outcome of the Federal Reserve policy meeting.
FUNDAMENTALS
* Spot gold XAU= had risen 0.1 percent to $1,233.70 an ounce by 0011 GMT and U.S. gold GCcv1 added 0.3 percent to $1,234.5 an ounce. Spot gold fell to $1,225.70 in the last session, its lowest since March 2.
* Worries about global growth and financial instability had led investors to reprice prospects for increases in U.S. rates, sending safe-haven gold to a 13-month high last week. But solid U.S. data readings more recently have rekindled market expectations of further tightening this year.
* The Fed began its two-day meeting on Tuesday and it is likely to issue a statement at 1800 GMT.
* Fed policymakers are seen leaving short-term interest rates unchanged but also to signal that a rate hike is not too far off as long as the job market and inflation continue to improve. Further U.S. rate rises could lift the opportunity cost of holding non-yielding bullion.
* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.26 percent to 792.23 tonnes on Tuesday from 790.14 tonnes on Monday. HLDSPDRGT=XAU
* In other news in the precious metals market, Russia plans to hold an auction for the Sukhoi Log gold deposit before the end of this year, Interfax news agency cited Russian Deputy Prime Minister Alexander Khloponin as saying on Tuesday.
* The Sukhoi Log deposit, in the Irkutsk region of Siberia, has remained one of the world's largest untapped gold deposits for half a century and Russia has been considering selling rights to the deposit for 20 years.
* For the top stories on metals and other news, click TOP/MTL or GOL
MARKET NEWS
* The dollar was in a holding pattern early on Wednesday as markets waited for fresh guidance from the Fed, while a disappointing fall in dairy prices knocked the New Zealand currency broadly lower. USD/
DATA/EVENTS (GMT) 1230 U.S. Consumer prices Feb 1230 U.S. Housing starts Feb 1230 U.S. Building permits Feb 1315 U.S. Industrial output Feb 1800 Federal Open Market Committee releases statement 1830 Fed Chair Janet Yellen holds news conference