Investing.com - Gold prices inched higher in early dealings on Wednesday, but stayed near their lowest level in five months as investors awaited the conclusion of the Federal Reserve's meeting, at which it is widely expected to raise interest rates by a quarter point.
Comex gold futures were at $1,243.90 a troy ounce by 3:20AM ET (0820GMT), up $2.30, or about 0.2%, from the last session's closing price. Gold prices fell Tuesday for a third-straight session, after touching its lowest level since July 20 at $1,238.40.
The Federal Reserve is widely expected to raise the fed funds target range by a quarter point at the conclusion of its two-day policy meeting at 2:00PM ET (1900GMT) on Wednesday, which would put it in a range between 1.25%-1.50%.
Fed Chair Janet Yellen is to hold what will be a closely-watched press conference 30 minutes after the release of the Fed's statement, as investors look for fresh clues on the likely trajectory of monetary policy in the months ahead.
The U.S. central bank will also release its latest forecasts for economic growth and interest rates, known as the "dot-plot". The Fed has forecast three rate rises for next year, and it is expected to keep its outlook about the same even though the market has been skeptical it will hike as much as it expects.
Wednesday's meeting will be the last under the leadership of Janet Yellen, whose term ends in February, when she will be replaced by Fed Governor Jerome Powell
Besides the Fed, Wednesday's calendar also features top-tier U.S. data on inflation. The Commerce Department will publish inflation figures for November at 8:30AM ET (1330GMT). Market analysts expect consumer prices to inch up 0.4%, while core inflation is forecast to rise 0.2%.
Meanwhile, investors also took note of a special Senate election in Alabama, which Democrat Doug Jones has been projected to win. If confirmed, the development will take the Republican Party's slim majority in the Senate down to 51 seats and could be a potential stumbling block as the GOP attempts to pass a tax reform bill.
In other metals trading, silver futures ticked up 5.7 cents, or 0.4%, to $15.72 a troy ounce, after hitting the lowest since mid-July in the prior session.