Panic selling? Huge purchase orders emerged gold rose sharply and fell sharply in the short term and reversed V reversal.

Gold prices rose and fell sharply in the short term on Tuesday as investors waited for policy hints from the Fed's two-day meeting, while small falls in Treasury yields and the dollar also provided some support.

In early trading, spot gold stood above $1740 an ounce for the first time since March 3, with a short-term rise of nearly $8, or 0.5%, but then quickly fell back from high to slightly below the level.

Data show that gold short-term ushered in a wave of buying. COMEX's most active gold futures contract traded 2502 lots in one minute at 22:29 on March 16, with a total value of US $435 million.

"Gold should have hit bottom, but the biggest risk is the Fed, and if the Fed doesn't fight back against the bond market, you could see an one-day panic sell-off in gold," said Edward Moya, senior market analyst at OANDA.

The two-day meeting of the Federal Open Market Committee ends on Wednesday.

The Fed is expected to reiterate that it will keep interest rates near zero until the economy is fully employed. Both the dollar and benchmark Treasury yields fell slightly.

Higher yields are likely to be accompanied by stronger gold prices in the coming months, as yields close to 2 per cent could undermine stock market buying and make gold a safe haven again, Mr Moya added.

While gold is seen as a hedge against inflation, concerns about rising prices triggered by stimulus measures and the economic recovery have pushed up Treasury yields and made gold less attractive because it does not pay interest.

For other precious metals, palladium rose 4.9% to $2520.31 an ounce, having hit an one-year high of $2520.31 an ounce.

"tight supply in the market, coupled with strong demand from the auto industry, caused the market to rise sharply in a light market," said independent analyst Ross Norman.

Russia's Norilsk Nickel (Norilsk Nickel), the world's largest palladium producer, said on Tuesday that its metal production in 2021 may not meet initial guidance levels because of problems at two mines in Siberia.