Gold held steady on Wednesday after falling 0.6 per cent in the prior session, as the dollar slipped amid expectations that the U.S. Federal Reserve was unlikely to raise rates next week.
Spot gold was up 0.1 per cent at $1,319.80 an ounce by 0430 GMT. US gold futures were nearly flat at $1,323.20 an ounce.
Goldman Sachs further cut its view on the likelihood of a U.S. rate hike next week, dropping it to just 25 per cent from 40 per cent. But it said the chances of the next rate hike occurring at the Federal Open Market Committee's (FOMC) December meeting have risen to 40 percent from 30 percent.
"Most expect Fed president Janet Yellen to give some warm-up for December hiking in next week's meeting," said Jiang Shu, chief analyst at Shandong Gold Group.
"We are slightly bearish on gold prices before the Fed meeting. Prices will touch $1,300 or below that shortly."
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
The dollar index, which measures the greenback against a basket of six major currencies, fell 0.1 percent to 95.535. A stronger greenback makes dollar-denominated gold more expensive for holders of other currencies.
Spot gold may revisit a low of $1,301.91 per ounce, as indicated by its wave pattern, a Fibonacci retracement analysis and a falling channel, according to Reuters technical analyst Wang Tao.
"The technically significant $1,305 level must hold, or we may see a wave of stop-loss selling, with the market excessively long," MKS PAMP Group trader Jason Cerisola said.
"Despite equity market weakness, gold continues to trade heavily," he added.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.47 percent to 935.49 tonnes on Tuesday.
Spot silver was up 0.3 percent at $18.90 an ounce. The metal fell over 1 percent in the previous session.
Platinum gained 0.1 per cent at $1033.73. It fell over 2 per cent to touch an over 2-month low of $1,026.10 on Tuesday. Palladium rose 0.8 pe rcent at $656.75. It hit a near 8-week low of $648.72 in the prior session.
