Gold inches up from near five-month low ahead of Fed meeting

Spot gold rose 0.2 percent to $1,244.30 an ounce by 0350 GMT, after hitting its lowest since July 20 at $1240.10 on Monday.

Gold was slightly higher on Tuesday, just up from its lowest in nearly five months in the previous session, and ahead of the start of a two-day U.S. Federal Reserve meeting.Spot gold rose 0.2 percent to $1,244.30 an ounce by 0350 GMT, after hitting its lowest since July 20 at $1240.10 on Monday.U.S. gold futures fell 0.1 percent to $1,246 an ounce.

"The overnight drop I suspect is continued long liquidation as evidenced in the weekends Commitment of Traders Report" said Jeffrey Halley, senior market analyst with OANDA.CFTC data from Friday showed speculators sharply cut their net long positions in gold to the lowest since early August due to recent price weakness."I would expect gold to remain offered on any rally and ... to retest its overnight lows around $1,240," Halley said, adding that a hawkish statement on U.S. interest rates from the Federal Open Market Committee could see gold under further pressure.The dollar was steady near a recent two-week high versus a basket of major currencies, as traders awaited results from the U.S. Fed's policy meeting for a fresh catalyst.At the meeting, which concludes on Wednesday, the U.S. central bank is widely expected to raise benchmark interest rates for the third time this year and comment on the pace of further rate hikes.

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