“Gold is caught between multiple conflicting data points regarding inflation — retail sales down 3% last month when 0.2% increase was anticipated, employment numbers from last week,” along with interest rates and U.S. dollar levels, Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch.

Gold for April delivery GC00, -0.10% GCJ21, -0.10% was up $1.30, or nearly 0.1%, at $1,730.50 an ounce on Comex, while May silver SIK21, -1.13% was off 26.3 cents, or 1%, at $25.04 ounce.

The Fed will conclude its two-day meeting on Wednesday, with a statement on monetary policy.

Read: Powell to be ‘nonchalant’ in the face of rising bond yields

“We expect a ‘goldilocks’ speech” from Federal Reserve Chairman Jerome Powell, “treading a cautious path with economic growth expectations being not too hot and not too cold,” said Ross Norman, chief executive officer at Metals Daily.

“The key issue, especially for gold, will be their expectations on interest rate increases,” he told MarketWatch, noting that 10-year treasury yields are up 60 basis points since their meeting in December, and they imply an increase in late 2022 — well ahead of their stated forecast of late 2023.

If the Fed “reiterates the slower path [on rate increases], then this might be to gold’s advantage,” Norman said. “A quickening pace on the other hand could see yields jump and gold correspondingly lower.” 

Meanwhile, Wright said he does not foresee any surprises from the Fed regarding policy, but “could see acknowledgement regarding inflation and lack of urgency as inflationary data has perked up in past two months.” Wright believes gold will rise, but at same time will not attract same level of interest from people with advent of bitcoin reaching record highs.

Gold remains down more than 8% for the year to date, having felt pressure from a rising U.S. dollar and a bond-market selloff that’s pushed the yield on the 10-year Treasury note TMUBMUSD10Y, 1.604% higher for six straight weeks. Higher yields raise the opportunity cost of holding non-yielding assets like gold.

Among other metals traded on Comex, palladium was a standout, with the most-active June contract PAM21, +5.36% up 4.7% at $2,485 an ounce.

Mining company Norilsk Nickel NILSY, -4.27% plans to completely restore production at two of its mines within three to four months, following a halt in operations due to flooding in February, Russian News Agency TASS reported Tuesday.

Since palladium supply was already tight, prices for the commodity are moving higher, said Wright.  

R. Michael Jones, chief executive officer of Platinum Group Metals Ltd. PLG, -2.60%, said “emission standards are tough and getting tougher” and “real demand is growing,” for palladium, which is used in gasoline-fueled vehicles.

Rounding out action in the metals, May copper HGK21, -1.36% fell by 1.4% to $4.08 a pound, while April platinum PLJ21, +0.45% traded at $1,213.20 an ounce, up 0.3%.