Gold prices edged up on Tuesday on a dollar that was close to hitting its lowest in over a year, while traders waited for retail sales data from the United States to gauge any impact on the US Federal Reserve’s monetary tightening path.

Spot gold rose 0.3% to $1,959.54 per ounce by 0359 GMT. US gold futures gained 0.4% to $1,963.70. The dollar wobbled near an over one-year low.

A weaker dollar makes gold cheaper for holders of other currencies. While the upcoming Fed meeting might temporarily dim the appeal of gold, “the Fed is closer to end of tightening cycle,” said OCBC Executive Director and FX Strategist Christopher Wong.

“It should not take long to see real yields ease lower at some stage.” Interest rate futures showed markets were pricing in another 25 basis points rate hike at the Fed’s July 25-26 meeting. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.

“We also favour long gold as a risk-off hedge (safe haven proxy) against slowing global growth or any risk-off market event,” Wong added. Speaking to Bloomberg TV on Monday, Treasury Secretary Janet Yellen said she did not expect the US economy to enter a recession.

Gold struggles for traction on doubts about Fed pause

Investors expect the European Central Bank and the Bank of England to go further with their rate-hike cycle as they try to bring down inflation down to 2% that was at 5.5% in June and 8.7% in May respectively.

Minutes of the Reserve Bank of Australia’s July policy meeting earlier today showed a restrictive stance, choosing to keep interest rates steady this month.

Investors will also watch for US retail sales data for June later in the day while weak Chinese economic data released the previous day continued to weigh on sentiment.

Spot silver rose 0.1% to $24.87 per ounce, platinum was up 0.7% to $982.43 while palladium jumped 1.1% to $1,298.30.