Gold prices eased on Tuesday as the US dollar held firm, while markets focused on upcoming US inflation prints for fresh signals on the Federal Reserve’s interest-rate trajectory.
Spot gold fell 0.2% to $4,164.45 per ounce by 0201 GMT after hitting a one-week peak on Monday.
US gold futures for December delivery fell 0.1% at $4,187.90.
The US dollar lingered near an 18-month high scaled in the previous session, making dollar-denominated metals more expensive for holders of other currencies.
The Consumer Price Index (CPI) is due on Wednesday, and the Producer Price Index (PPI) report is scheduled for Thursday.
“US CPI data will be critical for gold in the short-term,” said Kyle Rodda.
If inflation comes in hotter than expected, particularly on the core measure, and prompts even a modest increase in expectations of an October rate hike, it could result in another dip in gold, he added.
When interest rates are elevated, investors typically gravitate toward yield-bearing assets rather than gold.
Currently, traders see only a 21% chance of a Fed rate hike this month but are pricing in an 88% chance of a December increase, according to CME’s FedWatch tool.
Cleveland Fed President Beth Hammack said the US central bank should move “relatively quickly” to a more restrictive monetary policy stance to control inflation, which she feels has become broader-based and is starting to influence firms’ price-setting plans.
On the geopolitical front, Saudi Arabia said it was facing a new barrage of incoming fire and that Riyadh airport would remain shut for now, days after Saturday’s deadly missile strike on a departure terminal that was claimed by Yemen’s Iran-allied Houthis.
Among other metals, spot silver eased 0.5% to $60.01, platinum fell 0.2% to $1,682.47, and palladium fell 0.5% to $1,137.69.