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March 22 Reuters Gold prices traded flat on Wednesday as investors stayed on the sidelines ahead of the U.S. Federal Reserve39;s interest rate decision and policy outlook.

Spot gold was unchanged at 1,940.20 per ounce, as of 0747 GMT, after dropping 2 on Tuesday. U.S. gold futures were also flat at 1,940.60.

Market developments remain fluid but as it stands, it does appear that banking sector wounds are showing tentative signs of recovery after the emergency backstops and assurances from authorities … gold has eased lower as safehaven demand dissipates, said OCBC FX strategist Christopher Wong.

Bullion recently rallied as much as 10, or by about 180, to a oneyear high on safehaven demand after the collapse of U.S.based Silicon Valley Bank, which quickly ensnared lender Credit Suisse. But prices retreated after the rescue of Credit Suisse whetted risk appetite, although financial system uncertainties remained.

U.S. Treasury Secretary Janet Yellen told bankers on Tuesday the U.S. banking system was stabilising, but further steps might be needed if smaller institutions suffer deposit runs that pose the risk of contagion.

Investor attention is now on the Fed39;s decision scheduled at 1800 GMT, followed by a press conference by Chair Jerome Powell. The U.S. central bank is widely…