Gold prices nudged higher on Tuesday, after a sharp decline in the previous session, as investors looked forward to U.S. inflation data that could offer further insight into the Federal Reserve’s rate-cut trajectory.
Spot gold was up 0.2% at $3,350.03 per ounce, as of 0146 GMT. U.S. gold futures for December delivery were steady at $3,402.80.
Gold prices slipped 1.6% on Monday, while futures dropped by more than 2% after U.S. President Donald Trump said tariffs will not be placed on imported gold bars, easing jitters in the market.
“Market participants now will be definitely focusing on the upcoming Fed rate cut, which has been more or less priced in September. If we start to see the core CPI data came in slightly below expected, that could actually further support this rate cut expectations,” OANDA senior market analyst Kelvin Wong said.
“That could lower the cost of holding gold and the long-term U.S. 10-year treasury yield still remains below certain key resistance level, so that could actually support gold prices.”
All eyes are on U.S. consumer prices index data, which is due at 1230 GMT. Economists polled by Reuters projected that core CPI is likely to have risen 0.3% in July, pushing the annual rate higher to 3%, away from the U.S. Fed target of 2%.
Traders are pricing in around an 85% chance of a Fed rate cut next month, as per CME FedWatch Tool. Gold tends to perform well during periods of uncertainty and in a low-interest-rate environment.
Trump has repeatedly criticised the Fed for not cutting rates at recent meetings, and markets are also eyeing who will succeed current Chair Jerome Powell, whose term ends next May.
Traders appeared to show scant reaction to a statement from a White House official that Trump signed an executive order on Monday, extending a pause in sharply higher U.S. tariffs on Chinese imports for another 90 days.
Elsewhere, spot silver gained 0.6% to $37.81 per ounce, platinum rose 0.6% to $1,334.24 and palladium climbed 0.7% to $1,143.93.
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