Gold prices edged up on Wednesday to hit their highest since May 2018, supported by uncertainty over U.S.-China trade relations and expectations the Federal Reserve will keep rates on hold.
Spot gold was up 0.2 percent at $1,313.92 per ounce, as of 0503 GMT, after touching $1,314.62, its highest since May 15, 2018 earlier in the session. U.S. gold futures rose 0.3 percent to $1,312.9 per ounce.
"For the short-term gold is going to move higher as the U.S. Federal Reserve will have a dovish tone, which should weaken the dollar and give gold a bit of a move up," said INTL FCStone analyst Edward Meir. The absence of an agreement in U.S-China trade talks should also benefit gold, he said.
Investors are waiting on the Federal Reserve's policy decision later in the day, with expectations officials will reinforce their recent dovish stance given a stalemate on global trade, signs of a slowdown in the U.S. economy, and waning business and consumer confidence.
The Fed raised interest rates four times last year.
Investors are also concerned that criminal charges against China's Huawei Technologies Co. Ltd. for violating U.S. sanctions against Iran could complicate U.S.-China trade talks.
China's Vice Premier Liu is due to meet U.S. Trade Representative Robert Lighthizer later in the day.
"Gold also looks good on the charts ... Physical demand seems to be improving in some markets and ETF buying has been increasing. In general the path of least resistance is probably higher from here," Meir said.
Underscoring investor interest in the bullion, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 1 percent to 823.87 tonnes on Tuesday, to their highest since June.
SPDR gold holdings climbed 4.6 percent so far this month, their best since September 2017.
"A combination of falling treasury yields, anxiety over Brexit and Venezuela is all helping gold," said Nicholas Frappell, global general manager, ABC Bullion.
British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.
Silver rose 0.7 percent to $15.96 per ounce, its highest since July 2018.
Palladium dropped 0.1 percent to $1,344.50 per ounce, while platinum was up 0.7 percent at $815.00.