Uncertainty is still dominating gold little changed this morning for the second consecutive day following its best weekly rally since eight. Pressures kept the yellow metal on check ahead of the U.S. Federal Reserve`s policy decision tomorrow. Spot gold was nearly flat as of 10:52 (GMT+3) on Tuesday, compared with the opening level of $1621.67 an ounce. Meanwhile, the metal recorded an intraday high of $1625.21 an ounce and low of $1619.61 an ounce. In fact, the Fed`s has refrained from uncovering additional QE in their most recent meeting and settled for expanding Operation Twist and pledged to do what`s best to spur U.S. growth if it falters. The non-committal attitude has mainly kept gold-lovers on the sidelines. Also on the policy watch, the European Central Bank will announce its policy decision on Thursday, with heavy speculation that ECB will embark on extra measures needed as vowed by the chief Mario Draghi, where he pledged to do whatever needed to save the euro. Another round of quantitative easing from the Fed is likely to pile up pressure on the yellow metal on inflation outlook and push traders to buy bullions, which is mostly seen as a hedge against inflation or a so-called alternative investment. At the same time, the metal could also be seen building up again as further monetary easing from the ECB will probably press on the single currency, empowering instead the greenback and that should weigh back on gold prices. Overall, gains will be likely subdued and risk will be switched on and off very quickly amid uncertainty in Europe and looming fiscal and economic challenges in the U.S. and 17-bloc euro area, so traders should be laser-focused on policy events this week.

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