Gold prices edged lower on Tuesday as the dollar regained some footing, with investors awaiting US inflation numbers due this week for clarity on whether more rate hikes are on the table.
Spot gold was down 0.1 percent at $1,934.22 per ounce, while US gold futures were flat at $1,968.80.
The dollar strengthened 0.2 percent against major currencies making bullion more expensive for overseas buyers.
“The $64 question this week is the US inflation outcome,” said Clifford Bennett, chief economist at ACY Securities.
“The inflation reading, particularly the core number, could still be of significant concern to the Fed. The market already knows headline inflation is trending lower, but any firmness in the data could be a fresh downward catalyst for gold in the short term.”
A hotter-than-expected CPI number on Thursday could raise the possibility of another rate hike when Fed officials meet again in September. Rate hikes tend to lift bond yields, raising the opportunity cost of holding zero-yield bullion.
Gold prices are down for a second straight session, mainly weighed by comments from Fed Governor Michelle Bowman that additional interest rate hikes will likely be needed in order to lower inflation to the US Federal Reserve’s 2 percent target.
