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PRECIOUS-Gold edges higher, all eyes on Fed

BENGALURU, June 14 (Reuters) - Gold crept up early on Wednesday as the market waited for the end of a two-day U.S. Federal Reserve meeting, with the central bank expected to hike interest rates and give indications on its monetary policy for the rest of the year.

FUNDAMENTALS

* Spot gold had risen 0.2 percent to $1,267.85 per ounce at 0106 GMT. It hit a session low of $1,259.16 on Tuesday, its weakest since June 2.

* U.S. gold futures for August delivery climbed 0.1 percent to $1,269.80 per ounce

* Palladium, which marked a 16-year high last week, was down 0.5 percent at $878.25 an ounce.

* The Fed is widely expected to raise its benchmark interest rate this week due to a tightening labour market and may also provide more detail on its plans to shrink the mammoth bond portfolio it amassed to nurse the economic recovery.

* The Fed will probably express its confidence inflation will climb towards its 2 percent target at its meeting, but such assurances are a poor indicator of the central bank's future policy.

* U.S. Attorney General Jeff Sessions on Tuesday denounced as a "detestable lie" the idea that he colluded with Russian meddling in the 2016 presidential campaign, and he clashed with Democratic lawmakers over his refusal to detail his conversations with President Donald Trump.

* Britain entered a sixth day of political limbo on Wednesday with Prime Minister Theresa May yet to seal a deal to prop up her minority government and facing calls to soften her stance on Brexit days before negotiations on leaving the EU begin.

* The chances of Britain ending up outside the single market when Brexit talks are concluded have receded somewhat after last week's election, although the pound might weaken further against other currencies, a Reuters poll of economists found.

* European Union Currency Commissioner Pierre Moscovici said on Wednesday he expects Greece and its international lenders to reach a compromise deal on new loans this week and that a "fair solution" will be found on debt relief.

* Asian shares crept higher on Wednesday after Wall Street reached another all-time high, while the dollar and bonds awaited clarity on the Fed's future path for U.S. policy.

DATA/EVENT AHEAD (GMT)

0200 China Retail sales May 0200 China Industrial output May 0200 China Urban investment May 1230 U.S. Consumer prices May 1230 U.S. Retail sales May 1400 U.S. Business inventories Apr

1800 Federal Reserve announces policy meeting outcome 1830 Fed Chair Janet Yellen holds news conference

(Reporting by Nithin Prasad in Bengaluru; Editing by Joseph Radford)