Gold prices firm ahead of Fed announcement

(Reuters) - Gold prices held steady on Wednesday ahead of the outcome of a two-day Federal Reserve meeting, with the U.S. central bank widely expected to raise interest rates.

FUNDAMENTALS

* Spot gold had edged up 0.1 percent to $1,199.34 per ounce by 0040 GMT.

* U.S. gold futures were down 0.3 percent at $1,199 per ounce.

* With a rate increase by the Fed seen as a done deal, investor focus is shifting to what message the central bank will deliver when it concludes its meeting on Wednesday. In December the Fed forecast three rate rises this year.

* The statement from the Fed, due at 1800 GMT on Wednesday, will be followed by a briefing at 1830 GMT. [FED/DIARY]

* Investors were also focusing on Wednesday's Dutch elections, which have been boosting gold's safe-haven appeal.

* The Party for Freedom is seen as having little chance of coming to power, but a strong election performance for the group that wants to "de-Islamicise" the Netherlands would fuel worries over a surprise result in French presidential elections in April and May.

* In Britain, concerns have increased over a second Scottish independence referendum and the triggering of Article 50, which would formally begin British negotiations to leave the European Union.

* Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.36 percent to 834.99 tonnes on Tuesday from Monday. [GOL/ETF]

* U.S. producer prices increased more than expected in February as the cost of services such as hotel accommodation pushed higher and the year-on-year gain was the largest in nearly five years, pointing to steadily rising inflation pressures.

* One of the biggest mysteries in global markets so far in the Trump era is the historically low level of volatility that has prevailed despite all the turmoil and uncertainty that analysts warned his victory would unleash.

* China issued a raft of upbeat data on Tuesday showing the economy got off to a strong start to 2017, supported by strong bank lending, a government infrastructure spree and a much-needed resurgence in private investment.

* British firm BullionVault will from Tuesday offer customers a facility to buy, sell and store physical platinum held in bars weighing between 1 kg and 6 kg denominated in sterling, dollars or euros.

DATA/EVENT AHEAD (GMT)

1000 Euro zone Employment Q4

1230 U.S. Consumer prices Feb

1230 U.S. New York Fed manufacturing Mar

1230 U.S. Retail sales Feb

1400 U.S. Business inventories Jan

1400 U.S. NAHB housing market index Mar

1800 Federal Open Market Committee releases statement

1830 Federal Reserve Chair Janet Yellen holds news briefing

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Joseph Radford)