Gold prices held onto gains early on Thursday after the U.S. Federal Reserve left interest rates unchanged on Wednesday, and as investors awaited an announcement on a new chair for the central bank later in the day.

Fundamentals

* Spot gold was up 0.3 percent to $1,277.76 per ounce at 0047 GMT.

* U.S. gold futures for December delivery edged up 0.1 percent to $1,278.60.

* The dollar index, which tracks the greenback against a basket of six major rivals, was down 0.2 percent to 94.645.

* Asian shares advanced after the Fed expressed optimism about the economy, virtually cementing the case for a year-end rate hike as investors awaited the formal nomination of the next head of the central bank.

* U.S. President Donald Trump plans to nominate current Fed Governor Jerome Powell as the next chair of the U.S. central bank, a source familiar with the matter said on Wednesday.

* Rising expectations that President Trump will tap Powell, who is seen as more dovish on interest rates, have pressured U.S. Treasury yields and the dollar this week.

* Traders also awaited Donald Trump's tax plan, which Republicans plan to release Thursday morning.

* Holdings of the SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.14 percent to 849.59 tonnes on Wednesday.

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