(Gold story updated with price reaction to FOMC statement and gold investment advisor's comments)
NEW YORK (TheStreet) -- Gold prices began to firm up as investors gained a greater sense of direction on the economy after the Federal Open Market Committee maintained its target fed funds rate at 0% to 0.25% at its meeting Tuesday -- as expected.

"Gold is drifting higher as people's anxiety continues to rise," Wayne Atwell of Casimir Capital said. "The U.S. economy seems to be recovering at a weak pace. Every couple of weeks we seem to get news that it's recovering a little slower than we thought. I happen to think we won't have a double dip -- but it's certainly looking like we could.

The policymakers also hinted at possible additional quantatative easing.

"The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate," it said in a written statement.

On Tuesday, another key piece of economic data -- housing starts -- was also announced. The Department of Commerce said housing starts increased 10.5% in August to 598,000 from 541,000 in July, which was better than the 550,000 starts economists were expecting, according to Briefing.com.

Gold for December delivery was rising $3.70 to $1284.50* an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,289.40 and as low as $1,272. The U.S. dollar index was down 0.7% to $80.69 while the euro rose 1.2% to $1.32 vs. the dollar. The spot gold price was adding more than $7, according to Kitco's gold index.

This is in contrast to gold prices earlier today.

"Gold prices opened with minor losses on Tuesday morning, as market players held their cards steady ahead of US housing starts numbers and the post-Fed meeting microphone session ... Not much here that can be labeled as anything resembling profit-taking or correction," Kitco analyst Jon Nadler wrote in a daily note.

Video: Hedge Funds Behind Gold Rally >>

As investors awaited key economic news out the U.S., Indian gold shoppers remain sidelined for another day as near record price tags "offered nothing in the way of incentives to lure them out to local dealers during the present festival period," Nadler of Kitco wrote in his note.

Silver prices

was trading at $20.80 while copper prices were flat at $3.50.

Image placeholder title

Gold mining stocks, a more risky but more profitable way

to invest in gold

were trading in mixed territory.

Kinross Gold

(KGC) - Get Report

was rising by 0.4% to $18.90, while

Newmont Mining

(NEM) - Get Report

was advancing by 1.2% to $64.02.

Freeport-McMoRan Copper & Gold

(FCX) - Get Report

was falling by 0.6% to $82.89 and gold ETF

SPDR Gold Trust

(GLD) - Get Report

was **higher by 0.5% to $125.53.

Atwell of Casimir Capital said he likes that gold has been moving up at a slightly slower clip than gold mining stocks.

"Gold has sort of been moving up by inches and the shares have been moving up a little faster than that. This is an ideal environment from our standpoint. We think gold is at a very attractive level -- the gold price is high enough for the miners to make very, very good money in almost all cases, but its low enough so that a lot of people think it's going higher."

"From our standpoint, we just like to see gold move up an inch at a time so that it doesn't get too strong."

On Monday, gold prices inched up as investors bought the yellow metal ahead of the FOMC meeting. Gold for December delivery settled $3.30 higher at $1,280.80 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,285.20 and as low as $1,275.60 in Monday's session. The U.S. dollar index was lower by 0.13% to $81.29 while the euro was flat at $1.30 vs. the dollar. The spot gold price Monday was up $4.80, according to Kitco's gold index.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here:

Andrea Tse

.

>To follow the writer on Twitter, go to

Andrea Tse

.

>To submit a news tip, send an email to:

tips@thestreet.com

.

Readers Also Like:

>>How to Buy High Gold PRices: 5 Stocks vs. the ETF

Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.