Gold prices edged up on Thursday but hovered at a three-week low, as market participants braced for an expected rate cut decision by the U.S. Federal Reserve later in the day.

Spot gold rose 0.1% to $2,663.09 per ounce, as of 0924 GMT, after hitting its lowest level since Oct. 15 earlier in the session.

U.S. gold futures shed 0.2% to $2,670.00.

The dollar index eased from a four-month high, following Republican Donald Trump's win in the U.S. presidential election. A stronger dollar tends to make bullion less attractive for overseas buyers.

"The long-term impact of the new administration's trade policies could lead to higher inflation, potentially forcing the Fed to maintain elevated interest rates for an extended period. In such a scenario, non-yielding assets like gold would likely come under additional pressure," said Ricardo Evangelista, senior analyst at ActivTrades.

Gold is considered a hedge against inflation but higher interest rates reduce non-yielding bullion's appeal.

The market is expecting a 25-basis-point reduction from the Fed, which is set to announce its decision at 1900 GMT. All eyes are also on Chair Jerome Powell's press conference.

On Sept.18, the Fed kick-started the policy easing cycle with a half-percentage-point rate cut.

"The Fed is likely to signal a data-dependent path, but with the U.S. job market indicating a slowdown, that should be sufficient for cutting rates today. We still look for gold to rise to $2,900 over the next 12 months," said UBS analyst Giovanni Staunovo.

Elsewhere, China's central bank refrained from purchasing gold for its reserves for the sixth consecutive month in October, according to official data.

Spot silver was steady at $31.16 per ounce, platinum slipped 0.9% to $977.79 and palladium declined 0.5% to $1,029.85. All three metals were down for a second straight session.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Vijay Kishore)