By Lewa Pardomuan
SINGAPORE (Reuters) - U.S. gold futures slipped about 1 percent on Tuesday, hovering below a six-month high hit in the previous session as investors turned cautious ahead of the U.S. Federal Reserve's policy review, but tensions over Crimea could cushion the fall.
Since the U.S. central bank is already expected to announce another $10-billion cut to its bond-buying stimulus after the two-day meeting which starts on March 18, the impact of the decision on gold could be limited.
U.S. gold futures for April delivery hit a low of $1,358 an ounce and stood at $1,360.90 by 0728 GMT, down $12.00.
The contract rallied to $1,392.60 on Monday, its strongest since September last year.
Cash gold, which often tracks COMEX, fell $6.36 an ounce to $1,359.98, having rallied on Monday to a six-month high at $1,391.76 before profit taking kicked in.
Gold may fall back to $1,350 as it consolidates before charging higher to around $1,400, with the market also taking cues from the developments in the Black Sea Peninsula, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
"I think sentiment is a bit mixed," said Leung.
Gold has risen more than 10 percent so far this year on uncertainty over the pace of the U.S. economic recovery, worries about growth in China and renewed interest in bullion-backed exchange traded funds.
The United States and European Union imposed personal sanctions on Monday on Russian and Crimean officials involved in the seizure of Crimea from Ukraine as Russian President Vladimir Putin signed a decree recognising the region as a sovereign state.
Asian shares inched forward and the yen slipped in early trade on Tuesday after Crimea's vote to join Russia passed relatively peacefully, but investors remained wary ahead of this week's Fed meeting.
Asian shares rose on Tuesday and the yen remained well off recent highs as the threat of immediate military conflict in Ukraine receded, though investors remained cautious ahead of this week's Fed policy meeting.
The Fed is expected to continue to stick to reducing its monthly asset purchases by an additional $10 billion, and could also alter its forward guidance in its statement.
"In terms of our outlook, we doubt that the sanctions imposed by the West are over and suspect that the Europeans and the U.S. will gradually need to step up the pressure on the Russians, reluctant as they are to do so," said INTL FC Stone, in a report.
"This will mean that the move higher in gold is likely not over, but perhaps just seeing a temporary setback."
The physical market saw some selling, with demand from top consumer China likely to be muted in coming weeks as domestic prices stayed at discounts to cash gold.
Premiums for gold bars in Hong Kong were unchanged at $1 an ounce the spot London prices.
Gold's recent rally to six-month highs may spark a further jump to levels last seen in the second half of 2013, technical analysts said, but fresh highs could be followed by a slide back to last year's three-year lows.
(Editing by Sunil Nair and Anupama Dwivedi)