Spot gold was flat at $1,780.86 per ounce by 0724 GMT. US gold futures were little changed at $1,780.70 per ounce.

“We’re starting to see a bit of a perking up of the US dollar and bond yields as well,” DailyFX currency strategist Ilya Spivak said.

While no major policy changes are expected from the Fed’s two-day policy meeting ending on Wednesday, investors will pay close attention to Chairman Jerome Powell’s outlook on the economy.

“The most likely scenario that markets are looking for is a status quo result,” Spivak said, adding that, “the Fed is going to have a hard time sounding any more dovish than they already have been.”

The Bank of Japan maintained its massive stimulus on Tuesday and projected inflation missing its 2% target for years to come, while new restrictions to counter a surge in COVID-19 cases clouded prospects of a fragile economic recovery.