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PRECIOUS-Gold edges up as dollar dips, investors await rate hike outlook

March 21 (Reuters) - Gold prices inched up on Wednesday as the dollar crept lower, while investors awaited the conclusion of U.S. Federal Reserve's two-day meet for clues on faster monetary tightening, expecting the first rate increase of the year later in the day.

FUNDAMENTALS

* Spot gold was up 0.1 percent at $1,311.72 per ounce, as of 0118 GMT. Prices hit a nearly three-week low in the previous session at $1,306.91.

* U.S. gold futures for April delivery was flat at $1,311.60 per ounce.

* The dollar index against a basket of currencies was down 0.1 percent at 90.305 after climbing to 90.445 on Tuesday, its highest in almost three weeks.

* U.S. lawmakers neared agreement on Tuesday on a massive government spending bill that Congress hopes to pass by Friday, as congressional leaders worked to narrow their differences on thorny issues such as President Donald Trump's border wall.

* The world's financial leaders rejected protectionism on Tuesday and urged "further dialog" on trade, but failed to diffuse the threat of a trade war days before U.S. metals tariffs take effect and Washington is to announce measures against China.

* Voicing hopes that Beijing and the United States could avoid a trade war, Premier Li Keqiang told the close of the annual parliament session that China would open its economy further, so that foreign and Chinese firms can compete on an equal footing.

* British inflation was weaker than expected in February as the impact of the 2016 Brexit vote faded from the figures, easing some of the squeeze on consumers who have seen their pay rise more slowly than prices.

* Investment bank Goldman Sachs downgraded its forecasts for India's economy on Tuesday in the wake of a more than $2 billion

fraud at Punjab National Bank , warning it could spark

tighter regulation of the banking sector that would constrain credit growth.

* SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, said its holdings fell 0.04 percent to 850.54 tonnes on Tuesday from 850.84 tonnes on Monday.

* Russia's gold reserves stood at 60.5 million troy ounces at the beginning of March, the central bank said on Tuesday.

DATA AHEAD (IN GMT)

1230 U.S. Current account Q4 1400 U.S. Existing home sales Feb 1400 U.S. Existing home sales pct change Feb

1800 U.S. Fed Funds Target Price

(Reporting by Eileen Soreng in Bengaluru, Editing by Sherry Jacob-Phillips)