Sept 17 (Reuters) - Gold prices retreated on Wednesday from a record-high level touched in the previous session, as investors locked in profits and a firmer dollar weighed on prices ahead of the Federal Reserve's policy decision later in the day.
Spot gold was down 0.6% at $3,665.98 per ounce, as of 1037 GMT, after hitting a record high of $3,702.95 on Tuesday.
U.S. gold futures for December delivery dropped 0.6% to $3,701.70.
The dollar (.DXY), opens new tab edged 0.2% higher after dropping to a more than two-month low on Tuesday. A firmer dollar makes greenback-priced gold more expensive for overseas buyers.
"On several occasions when gold approached $3,700 it came off again, which could well suggest option writers defending that level," StoneX analyst Rhona O'Connell said.
Gold's relative strength index (RSI) stood at 75, down from a more than 17-month high of 81 on Tuesday, indicating that the metal was overbought.
The spotlight is on the U.S. central bank, which is expected to deliver a quarter-percentage-point rate cut later in the day. Remarks from Fed Chair Jerome Powell will also be closely watched for signals on the future path of interest rates.
"(We still) expect a 25-point cut but probably with three dissenting voters," O'Connell added.
U.S. President Donald Trump has called for Powell to enact a "bigger" rate cut.
Lower rates reduce the opportunity cost of holding non-yielding bullion.
Deutsche Bank raised its gold price forecast for next year to an average of $4,000 per ounce, up from $3,700 per ounce, citing favorable foreign exchange and rates environments that could drive further gains.
Elsewhere, in India supplies of used gold jewellery and coins, typically released when investors book profits, have been scarce with many expecting the bullion prices will continue to climb.
Spot silver slipped 2.6% to $41.44 per ounce, platinum was down 1.8% at $1,365.22 and palladium fell 2% to $1,152.45.
Reporting by Ishaan Arora in Bengaluru; Editing by Sherry Jacob-Phillips and Tasim Zahid
