Gold prices eased on Wednesday on overnight gains in US equities, with a May Day lull gripping most Asian markets ahead of a closely monitored Federal Reserve decision on the outlook for US interest rates.

Spot gold was down 0.3 per cent at $1,278.92 per ounce at 0630 GMT, while US gold futures fell 0.4 per cent to $1,280.70 an ounce.

Having been pressured earlier by slightly downcast findings from Chinese business surveys, global shares edged up on Tuesday after US President Donald Trump agreed with Democratic leaders to spend $2 trillion on infrastructure.

Potentially dulling appetite for gold as a safe-haven asset, China and the US began their latest talks in Beijing on Wednesday aimed at ending a bitter trade war.

“There is no need for inflation hedges in the gold market (given the strength in equity markets and economic data),” said Michael McCarthy, chief market strategist, CMC Markets.

“However, the pulling back of the US dollar from recent highs over the last few sessions has been broadly supportive of gold.”

The euro zone reported stronger-than-expected economic growth for the first quarter, easing some pessimism over the euro and jolting the economic bloc’s common currency higher against the dollar on Tuesday.

Many Asia financial markets are shut for a May Day holiday on Wednesday.

Most market players are looking to the culmination of a two-day meeting by the US Federal Open Market Committee (FOMC), which will likely determine the path of US interest rates, at least for this year.

“There has been some speculation that the recent strong GDP and employment data in the US might see the Fed signal a more hawkish stance. While I do expect the Fed to acknowledge the strong numbers, I don’t think they’ll shift their stance at all,” CMC Markets’ McCarthy added.

Elsewhere, silver fell 0.4 per cent to $14.88 per ounce, while platinum prices dropped 0.6 per cent to $880.75. Palladium declined 0.9 per cent to $1,375.55 an ounce.