An employee arranges one kilogram gold bars for a photograph at the YLG Bullion International headquarters in Bangkok, Thailand, on Jan. 13, 2016.

Gold prices held steady on Wednesday and headed for a monthly gain, supported by rising optimism surrounding U.S. interest rate cuts, while focus shifted to Federal Reserve's policy verdict due later in the day.

Spot gold held its ground at $2,407.85 per ounce, as of 0200 GMT, and has gained more than 3% for the month. U.S. gold futures edged 0.1% higher to $2,405.60.

At the conclusion of Fed's two-day meeting later on Wednesday, expectations are that the U.S. central bank will hold rates steady and policymakers will lay the groundwork for a September rate cut.

"The market wants to hear a confirmation that a September cut is on the cards and it will be the beginning of a policy easing cycle. Gold will rally if the Fed language indicates that multiple cuts are coming," said Kyle Rodda, a financial market analyst at Capital.com.

The U.S. rate futures market has fully priced in a 25-basis-point cut in September. Non-yielding bullion tends to thrive in a low interest rate environment.

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