LONDON, March 20: Gold steadied above $650 an ounce on Tuesday after erasing overnight gains, and dealers said the metal was expected to trade in a range in absence of clearer market direction.

Investors awaited any policy comments after a two-day meeting of the US Federal Reserve starting later in the day for cues on the dollar's move, that might affect gold.

The degree of success of the twin tasks of the Fed's efforts to manoeuvre the economy away from potential inflation pressures and prevent a housing sector slump would decide gold's price in the near-term, said Pradeep Unni, analyst at Vision Commodities Services.

Gold hit a high of $656 an ounce, just below Monday's one-week high of $656.25, before slipping to $653.80/654.80 by 1042 GMT. The metal was last quoted at $653.30/654.30 in New York late on Monday.

Gold is stuck in a range at the moment and its recovery in the last week or so has been pretty disappointing. The lack of movement suggests there is a lack of confidence, said Stephen Briggs, economist at SG Corporate and Investment Banking.

Gold often moves in the opposite direction of the dollar and is seen as a hedge against oil-led inflation. Near term outlook suggests the metal could remain locked in consolidation between $640 and $661, with a break above the topside resistance band targeting a move into the $670's, Standard Bank said in a daily report.—Reuters