LONDON (March 15): Gold prices edged up on Wednesday as the market waited for more clues on how many times the US Federal Reserve will raise interest rates this year and on uncertainty over the outcome of Dutch elections.

With an immediate US rate increase seen as a done deal, investors are focusing on what message the central bank will deliver when it concludes a two-day meeting on Wednesday. In December, the Fed forecast three rate rises this year.

Spot gold had edged up 0.5% to US$1,200.93 per ounce by 1040 GMT while US gold futures rose 0.1% to US$1,200.90 per ounce.

"The market is in wait and see mode for this afternoon when we hear what the Fed will do this year," Mitsubishi analyst Jonathan Butler said.

"The increase is largely in the price. The really interesting thing will be how hawkish the Fed sounds when they give the forecast of rate rises for the year," he said.

Gold is highly exposed to interest rates and returns on other assets, as rising rates lift the opportunity cost of holding non-yielding bullion.

The statement from the Fed, due at 1800 GMT on Wednesday, will be followed by a briefing at 1830 GMT.

Further bolstering gold, the dollar index slipped 0.1% to 101.620.

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

The Party for Freedom, which wants to "de-Islamicise" the country, is seen as having little chance of coming to power, but a strong performance could fuel worries about a surprise result in French presidential elections in April and May. 

"There is a risk that the far-right candidate may have an influence election and there is some hedging in gold ahead of that," Mitsubishi's Butler said, adding that looming Brexit talks also added to the geopolitical risk.

Gold prices have fallen more than 5% since the precious metal failed to sustain a break above its 200-day moving average at around US$1,261 in late February.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.36% to 834.99 tonnes on Tuesday from Monday, the second increase in a row after outflows last week.          

Silver rose 0.4% to US$16.90 an ounce.

Platinum was up 0.8% at US$939.60 while palladium added 0.2% to reach US$745.50. Palladium prices hit their lowest since Jan 31 at US$738.35 on Monday.