Gold slips from 12-week high on less dovish US Federal Reserve

Spot gold declines 0.5% as Fed signalled that it was unlikely to be deterred from raising interest rates this year

Gold edged down from 12-week highs on Thursday, after the US Federal Reserve acknowledged a challenging global economy, but signalled it was unlikely to be deterred from raising interest rates this year.

The less dovish tone of the Fed's statement weighed on gold, which had gained on global uncertainties from China to Europe.

Spot gold was down 0.5% at $1,119.69 an ounce by 0240 GMT. It peaked at $1,127.80 on Wednesday, its highest since November 3. US gold for February delivery gained 0.4% to $1,120 per ounce.

After keeping US interest rates unchanged as expected, Fed policymakers said the economy was still on track for moderate growth and a stronger labour market even with "gradual" rate increases, suggesting its concern about global events had diminished but not squashed chances of a rate hike in March.

Investors were also taking profits on gold after its recent runup, said Daniel Ang, investment analyst at Phillip Futures in Singapore. "I think the safe-haven appeal of gold is tapering off a bit and investors are looking at other havens such as the Japanese yen," Ang added.

Prior to the Fed's first policy meeting for the year, expectations for a US rate hike in March had receded amid the global economic headwinds.

But traders believe the Fed will still take the slow route to raising rates, boding well for gold.

"Although the Fed's comments were not as dovish as hoped, the continued expectation that future interest rate rises will be slow and gradual will support the metal," MKS Group trader James Gardiner wrote to clients.

A mild recovery in Asian stocks also dented gold's appeal as investors slowly returned to battered equities.

Other precious metals were similarly under pressure.

Spot silver slipped 0.2% to $14.46 and platinum was down 0.7% at $873.93. Palladium was steady at $496.90.