Gold prices edged higher, in line with gains in oil, but trading remained subdued ahead of tonight's crucial interest rate decision by the US Federal Open Markets Committee (FOMC).

At 11.56 pm, spot gold was quoted up at 581.25 usd an ounce against 578.10 usd at the time of the COMEX market close yesterday. Other precious metals also edged up.

Spot silver rose at 10.33 usd against 10.20 usd, platinum was up at 1,184.50 usd from 1,180.00 usd and palladium was up at 307.50 usd against 306.00 usd.

Gold closed lower yesterday amid late US dollar strength, as 'a general air of cautiousness ahead of today's FOMC meeting kept many on the sidelines,' said TheBullionDesk analyst James Moore.

Moore said 'narrow sideways trade has continued' today in gold and that prices 'look set to hold for the remainder of the day ahead of today's rate announcement'.

The market has fully priced in a 25 basis point hike in interest rates, although investors are waiting for the statement accompanying the Fed verdict for hints about further hikes ahead.

Higher interest rates support the dollar and help address concerns about price pressures. This usually diminishes the allure of gold as an alternative investment or hedge against inflation.

'With the exception of palladium, we see no need to hurry back into metals at the moment; there is considerable risk from US inflation/growth/interest rate expectations.'

'Implied volatility is high for all metals indicating that the market is not swamped with ... sellers; this should keep trading ranges wide and perhaps biased to the downside,' said UBS Investment Bank analyst John Reade.

Gold has lost some 26 pct of its value since hitting a 26-year-high of 730 usd in mid-May, on the back of record high oil prices, geopolitical tensions and uncertain prospects for the dollar.