The market is not expecting an interest rate increase at the Fed's two-day meeting starting on Tuesday but it is looking for hints on the timing and extent of future moves.
Spot gold was 0.2 per cent lower at $1,252.59 an ounce by 1326 GMT, not far from the previous session's peak of $1,258.79, its highest since June 23.
US gold futures fell 0.2 per cent to $1,252.
"The market is looking for clarity on the Fed's tightening cycle and when they are going to start with the tapering (of monetary stimulus)," said ETF Securities analyst Martin Arnold.
Taking the shine off gold slightly, investors climbed into European equities after a string of solid corporate updates. The US dollar hovered near a 13-month low against a basket of currencies on Tuesday, with traders not expecting the Fed meeting to alter the currency's recent weakness.
Markets give a less than 50 per cent probability of a US interest rate increase before the end of the year, according to CME's Fedwatch tool.
Also supporting gold were hurdles standing in the way of US President Donald Trump's economic stimulus and tax reform agenda.
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