Gold plumbs five-month trough amid FOMC meeting

Gold futures slipped in American trade to the lowest since July 20 as the dollar index hit the highest since November 21, following a basket of data from the US, the world's largest economy, while the Federal Open Market Committee starts its two-day policy meeting in Washington. 

As of 03:49 GMT, gold futures due on February 15 dipped to 0.35% to $1,242.50 an ounce from the opening of $1,246.90, while the dollar index advanced 0.25% to 94.10 from the opening of 93.87. 

Earlier US data showed producer prices rose 0.4% in November in line with expectations and with no change from October's reading, while core prices, excluding food and fuel, rose 0.3%, beating expectations of 0.2% and just below October's 0.4% rise. 

Now markets look upon the FOMC's last 2017 meeting today and tomorrow, with policymakers expected to unveil their three-year forecasts for inflation, growth, unemployment, and interest rates, while expected to also hike rates by 25 basis points for the third time this year. 

Goldman Sachs has recently projected four Fed rate hikes in 2018, while raising US growth forecasts to 2.5% from 2.4%, and cutting the unemployment rate projections to 3.7%.