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Dec 13 2017, 02:23 PM (+06) | Fortfs.com

Gold were higher in Asian trading hours on Wednesday, with market participants focusing on the Federal Reserve interest rate decision and statement later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.31 percent at $1.245.50 a troy ounce as of 02:20 GMT.

The yellow metal settled near five-month lows in the previous session as the dollar continued to strengthen in the light of upbeat economic data that pointed to a rising inflation level.

Better-than-expected wholesale inflation anticipated an improving inflationary environment which, together with growing consumer prices, might push the Federal Open Market Committee to speed up its rate normalization process in 2018.

Dollar-denominated gold is sensitive to interest rate moves. A stronger base currency makes the metal more expensive and less competitive for investors holding other currencies.

According to the US Labor Department, the producer price index rose 0.4 percent in November. On yearly basis, the PPI added 3.1 percent, compared to a prior month reading of 2.8 percent and a forecasted 2.9 percent build.

A report issued by the Bank of Montreal suggested markets players are currently pricing in two rate hikes for 2018 but that might change if the CPI supports the case for more adjustments.

The Federal Reserve will announce its interest rate decision at 19:00 GMT, along with a revision of economic projections and its monetary policy statement. A press conference by Fed Chair Janet Yellen is expected half an hour later.

According to the CFTC, large speculative net long position on gold dropped 51,100 to 173,300, which marks a 17-week low as a widely anticipated monetary policy decision gets closer.

The consumer price index for November is due for release as of 13:30 GMT. Economists are forecasting a 0.4 percent month-over-month build and a 1.8 percent year-over-year increase

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