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Gold inched down on Tuesday but stayed near a four-week high touched in the previous session as investors waited for clues from a two-day U.S. Federal

Spot gold was down 0.3 percent at $1,279.35 an ounce as of 0354 GMT. Bullion, which has gained more than 5 percent this month, touched a peak of $1,287.0 on Monday, its highest since May 16.

The Fed is widely expected to leave interest rates unchanged at the conclusion of its policy meeting at 18:00GMT, or 2:00PM ET, Wednesday, the U.S. central bank could provide guidance on its pace of tightening over the next several months.

The central bank will also release its latest forecasts for economic growth and interest rates.

Market players are pricing in just a 2% chance for a rate hike this week and 23% for July, according to CME Group's (NASDAQ:CME) FedWatch tool. September odds were at about 37%.

Traders will digest a report on U.S. retail sales at 12:30GMT, or 8:30AM ET, Tuesday while awaiting the conclusion of the Fed meeting.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose 0.15% to 94.56, up sharply from last week’s lows of 93.41.

Prices of the precious metal are up nearly 6% so far in June, after sliding more than 6% a month earlier, as market players reacted to shifting views on the timing of the next U.S. rate hike.

"I think investors have decided to take profits and some of them are staying on the sidelines before taking a decision on what to do next until the Fed makes an announcement," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.

"We think that the risk of Britain leaving has now increased substantially and the Fed will therefore signal its willingness in no uncertain terms to 'stay the course' in light of this potential 'Black Swan' event," INTL FCStone analyst Edward Meir said in a note.

Hong Kong Exchanges and Clearing Ltd is aiming to launch its planned physically-delivered gold futures contract in September, its head said on Tuesday.

Asia, the top bullion-buying region, has seen several gold contracts launched in the last few years as it clamours to gain pricing power over the metal.

"We will be launching this physically delivered gold contract, hopefully in September subject to (regulatory) approval," Charles Li said at an industry event.

The gold contract will be simultaneously denominated and settled in U.S. dollars and Chinese yuan, he said.

Reference:Reuters, Investing