Gold prices edged up today as worries about a worsening euro zone debt crisis supported safe-haven sentiment ahead of the conclusion of a US Federal Reserve policy meeting.

The Fed, which has made clear it is intent on taking further steps to lift growth, is expected to decide to stock up on longer-term Treasury notes to boost a faltering economy.

In the latest sign that US growth has stalled, new construction of US homes fell more than expected in August, keeping pressure on president Barack Obama to do more to help the economy.

Spot gold edged up 0.3 per cent to $1,808.69 an ounce after a 1.4-per cent rally in the prev ious session. Gold is headed for a 20-per cent jump in the third quarter, its biggest quarterly rise in 25 years.

US gold inched up 0.2 per cent to $1,811.90.

If the Fed announces measures short of another round of quantitative easing, gold is likely to slip below $1,800 as disappointed investors might sell bullion to cover potential losses in equities, investors said.

Asian stocks edged up and the euro clawed back lost ground as investors waited for the Fed statement.

Gold's rally will extend beyond $2,000 an ounce in the next year, but will not match the record-breaking 50 per cent surge of the last 12 months, according to an annual survey of gold investors and analysts at the world's biggest bullion traders event.

Reuters