Gold Near Five-Month Low Before US Federal Rate Decision
Gold prices held near their lowest in nearly five months as investors looked ahead to an expected U.S. interest rate increase and clues from the U.S. Federal Reserve on its plans for further rises next year.
The Fed’s policy statement and latest economic projections are due at 1900 GMT. Fed Chair Janet Yellen will give a news conference half an hour later, her last before her four-year term ends early next year.
Gold is sensitive to rising rates because they push up bond yields, reducing the appeal of non-yielding gold. They also tend to boost the dollar, making gold more expensive for holders of other currencies.
However, the dollar and U.S. yields fell on Wednesday after data showed sluggish growth in consumer prices, contradicting signs that inflation may be firming and suggesting that the Fed may raise rates more slowly next year.
The Fed has increased rates twice this year and is expected to raise them three more times in 2018.
Spot gold was up 0.1 percent at $1,244.51 an ounce at 1531 GMT. On Tuesday it touched $1,235.92, the lowest since July 20.
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