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Gold prices edged lower on Wednesday due to a stronger dollar as investors look forward to the outcome of the U.S. Federal Reserve meeting for hints on tapering of economic support measures.
FUNDAMENTALS
* Spot gold was down 0.2% at $1,855.12 per ounce, by 0114 GMT.
* U.S. gold futures were steady at $1,856.20 per ounce.
* The dollar held steady near a one-month high against its rivals, making gold more expensive for holders of other currencies.
* U.S. retail sales dropped more than expected in May, data on Tuesday showed, while producer prices jumped by 6.6% year-over-year during the month, the largest gain since November 2010.
* The U.S. central bank is expected to acknowledge the first conversations among its policymakers on when and how fast to pare back the massive bond-buying program launched in 2020 at its policy meeting later in the day.
* Recent data showing a spike in U.S. consumer prices have raised concerns over rising inflation. But, Fed officials have said rising inflationary pressures are transitory and ultra-easy monetary settings will stay in place for some time.
* Some investors view gold as a hedge against higher inflation that could follow stimulus measures.
* Demand for gold from jewelers and central banks will recover in 2021 but remain below pre-pandemic levels, while buying of bullion by exchange traded funds (ETFs) will fall sharply, consultants Metals Focus said.
* Silver eased 0.1% to $27.62 per ounce, palladium gained 0.1% to $2,765.96, while platinum fell 0.2% to $1,151.54.
DATA/EVENTS (GMT) 0600 UK CPI YY May 0700 China Industrial Output YY May 0700 China Retail Sales YY May 1230 US Housing Starts Number May 1800 US Federal Open Market Committee announces its decision on interest rates followed by statement (Reporting by Brijesh Patel in Bengaluru; Editing by Shailesh Kuber)