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By Bloomberg

Gold held below $1,100 an ounce as investors await the outcome of a Federal Reserve policy meeting for a signal on the timing of interest rate increases.

Bullion for immediate delivery rose 0.2 percent to $1,097.18 an ounce at 12:29 p.m. in Singapore, according to Bloomberg generic pricing. Gold last week fell to $1,077.40, the lowest since February 2010, on expectations that U.S. interest rates will rise this year, limiting the metal’s appeal.

While the metal has found support since touching last week’s low, prices will probably move down, Perth Mint Treasurer Nigel Moffatt said in an interview with Bloomberg Television on Wednesday. The mint refines almost all of the bullion in Australia, the second-largest gold producer.

“I wouldn’t be at all surprised to see it fall further,” Moffatt said. “There’s quite a lot of expectation that we are going to get down to that $1,000 mark.”

Spot gold last closed over $1,100 on July 21. Prices will drop to $984 before January, according to the average estimate in a Bloomberg News survey of 16 analysts and traders. That would be the lowest since 2009.

Fed policy makers began a two-day meeting on Tuesday, and officials will release a statement at the conclusion that may provide insight on when they plan to start tightening. While economists see no chance the central bank will raise rates this week, they put the odds of a September boost at about 50 percent, a Bloomberg survey published July 22 showed.

‘Intrinsic Value’

As the threat of interest rate rises weighs on gold, the metal also has lost its appeal as a commodity and as an alternative to currencies, according to Macquarie Group Ltd.

“That’s really why we’ve been seeing gold tracking its way down to the levels we see at this time,” the mint’s Moffatt said. “However, gold does still have intrinsic value,” shown by central bank purchases by nations including Russia, he said.

Demand for bars and coins has risen since gold fell below $1,100 an ounce, driven by purchases from China, India and Thailand, according to Moffatt.

“These countries tend to be value buyers and they look to stock up when the price is right,” he said. Sales of American Eagle gold coins at the U.S. Mint in July are heading for the biggest monthly total since April 2013, while buying has also increased at the Royal Canadian Mint.

The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, retreated 0.1 percent on Wednesday after it jumped to a fifth weekly advance Friday.

Gold for December delivery, the contract with the most open interest, was little changed at $1,096.60 an ounce on the Comex in New York. Most-active prices fell 4.1 percent last week, dropping to $1,073.70 on Friday, the lowest level since February 2010. Bullion of 99.99 percent purity increased as much as 0.7 percent to 221 yuan a gram ($1,107.12 an ounce) on the Shanghai Gold Exchange and was at 219.70 yuan at 12:38 p.m. local time.

Silver for immediate delivery rose as much as 0.5 percent to $14.7583 an ounce, and was at $14.7245. Platinum climbed 0.4 percent to $988.35 an ounce. Palladium rose as much as 1.1 percent to $628.80 an ounce, and traded at $625.95 an ounce after it fell last week to the lowest price since October 2012.