* Market watching whether Russia sells gold to fund spending -OCBC
* Coming up: FOMC releases statement at 1900 GMT (Updates prices)
By Manolo Serapio Jr
SINGAPORE, Dec 17 (Reuters) - Gold steadied at just below $1,200 an ounce on Wednesday ahead of the outcome of the U.S. Federal Reserve's last policy meeting of the year, when it may signal how soon it will raise interest rates.
Investors were also keeping an eye on Russia after the rouble plunged more than 11 percent against the dollar on Tuesday despite a hefty interest rate hike by the country's central bank.
Spot gold was up 0.2 percent at $1,198.66 an ounce by 0707 GMT after a volatile session on Tuesday that pushed it to a session high above $1,221 then to a one-week low of $1,188.41, before ending marginally firmer.
Investors will be watching whether the Federal Open Market Committee will remove the phrase "considerable time" in the statement it will release at 1900 GMT with regard to the timing of an interest rate hike.
Dropping that phrase would mean the Fed is preparing the market for a rate hike next year as the U.S. economy gathers strength, analysts say, which could weaken prices of non-interest bearing assets such as gold.
"I think the Fed will reaffirm that growth has indeed picked up and the data looks positive for the coming year," said Barnabas Gan, analyst at OCBC Bank.
While Gan said the Fed might keep the 'considerable time' phrase to avoid shaking markets, investors were still looking to a higher interest rate environment in 2015 amid a rosier global economy backed by the U.S. recovery.
U.S. gold for February delivery rose 0.4 percent to $1,199.10 an ounce.
With regard to Russia, Gan said the main risk was whether the country would sell its gold holdings to finance spending.
"If that happens, we would see gold taking another step down, possibly closer to our year-end forecast of $1,150," he said.
The rouble has fallen nearly 20 percent this week, taking its losses this year against the dollar to more than 50 percent and stirring memories of the 1998 crisis when the currency collapsed within a matter of days, forcing Russia to default on its debt.
Other precious metals were firmer, with spot silver climbing more than 1 percent and platinum up 0.7 percent.
Precious metals prices 0707 GMT Metal Last Change Pct chg YTD pct chg Spot Gold 1198.66 2.45 +0.20 -0.52 Spot Silver 15.85 0.18 +1.15 -18.34 Spot Platinum 1196.60 7.70 +0.65 -12.50 Spot Palladium 782.10 3.12 +0.40 9.69 COMEX GOLD FEB5 1199.10 4.80 +0.40 -0.37 COMEX SILVER MAR5 15.90 0.15 +0.94 -18.84 Euro/Dollar 1.2484 Dollar/Yen 117.17 COMEX gold and silver contracts show the most active months
Reporting by Manolo Serapio Jr.; Editing by Joseph Radford