Gold prices steadied on Tuesday after hitting a three-week low in the previous session as investors awaited key US inflation data and major central bank policy meetings for clues on interest rates.
Spot gold was flat at $1,982.19 per ounce as of 0253 GMT, after hitting its lowest level since Nov. 20 on Monday. US gold futures rose 0.2% to $1,997.50.
“The Fed may not be so aggressive with rate cuts that are in line with current dovish market expectations. So that has resulted in some profit-taking and short-term players taking a speculative bet on gold,” said Kelvin Wong, a senior market analyst for Asia Pacific at OANDA.
“On the technical front, the support level to watch out will be $1,955 per ounce - the 200 day moving average - and we have the near-term resistance around $2,005.”
An upbeat US jobs report last week reined in hopes that the Federal Reserve could cut interest rates as soon as March.
All eyes will now be on the US Consumer Price Index (CPI) report, due at 1330 GMT.
Economists polled by Reuters expect US headline inflation to be flat for November and core inflation to be steady at an annual pace of 4% - well above the Fed’s 2% target.
The Federal Open Market Committee’s two-day monetary policy meeting will end on Wednesday with its interest rate decision and the release of its summary economic projections.
Traders widely expect the Fed to leave rates unchanged at 5.25%-5.50% this week and are pricing in an about 77% chance of a rate cut in May, according to the CME FedWatch Tool.
Lower interest rates tend to support non-interest-bearing bullion.
The European Central Bank and the Bank of England will hold policy meetings on Thursday.
Spot silver was steady at $22.80 per ounce, while platinum eased 0.1% to $909.27, and palladium climbed 0.4% to $961.28 per ounce.
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