A separate Labor Department report released Wednesday showed US inflation-adjusted wages were unchanged in November, as consumer prices outpaced average hourly earnings.
The U.S. central bank held rates unchanged on Wednesday amid expectations the economic system will proceed to develop reasonably next year and unemployment remain low.
"The policy rate is highly unlikely to move higher and the Fed is capping the rise in real medium-term yields, as well as nominal yields, at the belly of the U.S. Treasury curve, so you reduce the opportunity costs of holding gold", said Doshi.
The latest rise in the Producer Price Index pushed the gain in wholesale prices over the last 12 months up to 2.2%, the highest rate since March 2012, the. Airfares fell 0.9 percent in November and are up 2.0 percent for the year.
In comparison to the month before, headline CPI increased by 0.3%, led by a 0.8% jump in energy prices. It was lifted by gains in healthcare and prices of used cars and trucks, recreation and hotel and motel accommodation.
Within the CPI, food inflation climbed to a historic high of 8.66% in November compared with 6.93% in October, which itself was a 39-month high.
The Fed tracks the core personal consumption expenditures (PCE) price index for its 2.0% inflation target.
What the 34-year-old crown prince had initially sought was a $2 trillion valuation for Aramco and the sale of up to 5% of the company - on an worldwide stock exchange as well as the Saudi market - that could raise $100 billion.
Data released just days before the MPC meeting showed that GDP growth rate in July-September quarter slipped to six-year low of 4.5 percent on the back of weak consumer demand and slow manufacturing activity.
The result would be that Aramco would account for roughly 0.5% of the weighting of the MSCI Emerging Markets Index, leaving it as the index's 25th largest holding as of November 30. However, only 1.5 percent is now open to investors and its valuation is still below the 2 trillion goal and short of the 100-billion-U.S. -dollar global offering.
"As a result, we expect the MPC to remain on hold in its February 2020 policy review", Nayar said.
"The recent volatility in the claims data is likely due to seasonal adjustment issues that we often see around the holiday season, and we saw a similar pattern across the weekly claims readings around Thanksgiving in 2013 when the holiday fell on November 28 like it did this year", said Daniel Silver, an economist at JPMorgan in NY.
There is still no sign that US tariffs on Chinese imports are boosting inflation. Even with the CPI perking up, the outlook for inflation remains benign.
Prescription drug prices fell 0.1 percent for the month and are up 0.5 percent over the previous year. "Increases in the indexes for medical care, for recreation, and for food also contributed to the overall increase". Core goods prices increased 0.2%. In the meantime, fuel inflation declined for the fifth straight month.