Spot gold was little changed at $1,764.46 per ounce at 0907 GMT, while U.S. gold futures were up 0.1% to $1,765.00 per ounce.
"The big question that needs to be answered is will the current market uncertainty change any prospective timeline that the Fed might have when it comes to announcing its tapering of asset purchases," said Michael Hewson, chief market analyst at CMC Markets UK.
"That more than anything is likely to put further downward pressure on gold."
The U.S. central bank concludes a two-day meeting on Wednesday. Some market watchers believe it could announce tapering of asset purchases in the fourth quarter, and as a result push gold lower.
Bullion is considered a hedge against inflation and currency debasement likely to result from the widespread stimulus.
A surprisingly hawkish Fed could also dull bullion's appeal, as an eventual interest rate hike would raise the opportunity cost of holding the non-interest bearing asset.
Offering some respite to gold, the U.S. dollar slipped 0.1% after hitting a near one-month peak in the previous session.
Meanwhile, world stocks stabilised and investors grew more confident that contagion from the distress of debt-saddled Chinese developer Evergrande would be limited.
"In the longer term, they're (gold prices) still skewed to the downside because we're going to continue to see the Fed wanting to push towards normalizing monetary policy, which typically is not a good environment for gold," IG Market analyst Kyle Rodda said.
Elsewhere, silver edged 1.2% higher to $22.51 per ounce.
Platinum climbed 1.3% to $922.34 per ounce, while palladium rose 1.1% to $1,905.67.
(Reporting by Arundhati Sarkar and Eileen Soreng in Bengaluru; Editing by Mark Potter)
By Arundhati Sarkar