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• Gold prices rose on Wednesday, ticking up from a four-month low hit in the previous session, as Chinese buyers returned to the market following the Labour Day holiday, while investors waited for cues on U.S. monetary policy from a two-day Federal Reserve meeting.

• Spot gold was up 0.5 percent at $1,309.71 per ounce at 0653 GMT. Gold fell to $1,301.51 in the previous session, its lowest since Dec. 29, 2017.

U.S. gold futures for June delivery rose 0.31 percent to $1,310.80 per ounce on Wednesday.

• "The Chinese are back from a long holiday and we're seeing some buying interest on the downside," said Peter Fung, head of dealing at Wing Fung Precious Metals.

But gains should be limited as the dollar is firm and as people are waiting for U.S. non-farm payroll data, added Fung.

• The dollar index was down about 0.1 percent at 92.357, but the greenback hovered close to a near four-month high of 92.566, supported by the outlook for a strong U.S. economy and rising yields amid signs of slowdown elsewhere, especially in Europe.

• While the Fed is widely expected to keep interest rates on hold at its policy meeting ending on Wednesday, the central bank will likely encourage expectations that it will lift borrowing costs in June on the back of rising inflation and low unemployment. The Fed is due to announce its decision at 2 p.m. EDT (1800 GMT).

• Investors are also focused on the April U.S. non-farm payrolls report due on Friday, which could provide further signs of economic strength.

• Inflation is sometimes regarded as gold-positive, because bullion is seen as a safe-haven when price pressures rise, but higher interest rates imposed to fight inflation make the non-yielding metal less attractive.

• Spot gold may end its current bounce below resistance at $1,317 per ounce and then retest support at $1,302, as suggested by a Fibonacci ratio analysis, according to Reuters technical analyst Wang Tao.

• Meanwhile, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.51 percent to 866.77 tonnes on Tuesday.

• Among other precious metals, spot silver rose 1.3 percent to $16.32 per ounce. Prices touched a more than four-month low of $16.04 in the previous session.

• Platinum was up 0.9 percent at $898.05 per ounce. The metal touched its lowest this year at $888.50 on Tuesday. Palladium climbed 0.5 percent to $953.30 per ounce.

• As gold’s slide continues, the 200-day moving average and psychologically important $1,300 level become a key support area for the precious metal, says MKS (Switzerland) S.A. As of 7:55 a.m. EDT, spot gold was $7.40 lower to $1,308.20 an ounce and bottomed at $1,307.70, its weakest level since March. ““Support-wise, we are nearing some key technical levels with the 200 DMA at $1,304 and the psychological $1,300 level below that,” MKS says. On the upside, MKS says gold should find some resistance at the 100-day moving average. This now lies near $1,322.

• Brown Brothers Harriman points out that the U.S. dollar index – which measures how the greenback is faring against a basket of currencies – has moved above its200-day moving average for the first time in more than a year. “Most of the world's financial centers are closed for the May Day holiday, but the lack of participation has not prevented the extension of the U.S. dollar's recovery,” BBH says. “The dollar index has traded above its 200-day moving average for the first time in a year. No new catalyst has emerged. The widening interest-rate differential in the dollar's favor over Germany, for example, is unprecedented. Just like Fed officials can be more confident that their mandates are within reach (than it was before and more than the other major central banks), so too are investors.” The 200-day average for the dollar index stands at 91.85. As of 7:51 a.m. EDT, the index was up 0.425 point to 92.055.

• TD Securities cautions that gold is moving toward $1,300 an ounce on U.S. dollar strength, but also suggests the precious metal could rebound toward $1,350later in 2018. “If we continue to see the U.S. economy do well and the Fed signals a hawkish tone, with many observers advocating four hikes for the year, this could be bad news for gold for now,” TDS says. “However, considering the fact that the curve has flattened somewhat since the 10-year Treasury yield moved to about 3%, that the momentum in the U.S. is weakening somewhat and that U.S. deficits are reaching spectacularly high levels, the yellow metal should hold its own. While a move toward a low of $1,300/oz is possible in the not-too-distant future, we think there will be a steadier rebound toward $1,350s in the latter half of 2018.” As of7:55 a.m. EDT, spot gold was $7.40 lower to $1,308.20 an ounce.

Reference: Kitco,Reuters