Gold settled flat at 26826 swung between small gains and losses in cautious trade on Wednesday, as market players were jittery ahead of the Federal Reserve's highly anticipated policy statement, expected later in the day. Support seen in the earlier trades as rupee fell on Wednesday as the worsening crisis in Iraq threatened to disrupt oil supplies but recovered from session lows after state-owned banks sold dollars, likely on behalf of the central bank. Meanwhile Comex Gold recovered to trade near to $1277 after the Fed hinted at a slightly faster pace of interest rate increases next year but slashed its forecast for U.S. economic growth this year, lifting bullion's safe-haven appeal. After a two-day policy meeting, the central bank slashed its forecast for U.S. economic growth to a range of between 2.1 percent and 2.3 percent from an earlier forecast of around 2.9 percent, but expressed confidence the recovery was largely on track. The Fed also reduced its monthly asset purchases from $45 billion to $35 billion, but suggested rates eventually would be lower than it had indicated previously. Gold market participants have been monitoring the Fed's policy statements for clues on when it might begin raising interest rates, a move likely to weigh on bullion, which does not offer its holders interest or dividends.  A high reading for U.S. inflation on Tuesday raised expectations the Fed might signal a sooner-than-expected rise in interest rates. Reflecting bearish investor sentiment toward bullion, holdings in SPDR Gold Trust, fell 0.26 tonne to 782.62 tonnes on Tuesday. Technically market is under fresh selling and getting support at 26690 and below same could see a test of 26553 level, And resistance is now likely to be seen at 26964, a move above could see prices testing 27101.

Trading Ideas:

Gold trading range for the day is 26553-27101.

Gold steadied before the conclusion of a two-day U.S. Fed meeting, which was expected to yield a more hawkish tone from the central bank.

Fed on said it was leaving its benchmark interest rate unchanged at 0.00-0.25% but said it would cut its monthly bond-buying program to $35 billion

Gold jewellery exports from India are likely to grow by a quarter in the year to March 2015, helped by an expected relaxation of import policy.