Gold gains with Fed rate decision in spotlight

Sept. 16 (Reuters) - Gold prices ticked up on Wednesday as oil prices eased, while market participants looked ahead to the U.S. Federal Reserve's policy decision, with a rate hike largely priced in.

Spot gold XAU= was up 0.8% at $4,328.39 per ounce, as of 0310 GMT, after scaling a more than one-month low on Monday. U.S. gold futures GCcv1 for December delivery were down 0.9% at $4,369.50.

"A hawkish Fed could pull gold down, while any soft messaging may ease bets on hikes and help the metal recover. Traders are also monitoring oil prices and developments in the Middle East," said Frank Walbaum, a market analyst at trading platform Naga.com.

Gold is often seen as an inflation hedge, but higher rates increase the opportunity cost of holding non-yielding bullion.

Oil prices fell after an unexpected build in U.S. crude inventories, while investors assessed supply risks after Saudi Arabia suspended oil loading at its Yanbu port. O/R

Traders are pricing in a 92.4% chance of at least a 25-basis-point U.S. rate hike later in the day, according to CME FedWatch. The policy decision will be followed by a press conference from Fed Chair Kevin Warsh.

On the geopolitical front, Saudi Arabia air defences destroyed a Houthi drone south of Mecca before it entered prohibited airspace over the holy city, a spokesperson for the Saudi-led military coalition in Yemen said, as fighting spreads in the Middle East.

Commerzbank said it was somewhat surprising that gold prices had not come under greater pressure so far. It noted that gold's resilience may be supported by persistent fiscal concerns, reflected in elevated long-term government bond yields, as well as a recent rise in U.S. political risks. US/

Among other metals, spot silver XAG= rose 1.5% to $64.60 per ounce, platinum XPT= edged 0.7% higher to $1,788.25, while palladium XPD= gained 1.6% to $1,309.80.