Gold sees small uptick as dollar dips ahead of inflation data
Gold rebounds on weaker dollar, eyes U.S. inflation data as investors gauge impact on interest rates. Fed decision looms.
Gold prices rose on Tuesday, bouncing back from yesterday's low. This was helped by a weaker dollar, as investors await U.S. inflation data and central bank meetings for clues on interest rates.
As of 10:50 GMT, spot gold was up 0.3% at $1,987.36 per ounce. The dollar fell 0.3% against other currencies - making gold cheaper for those using other currencies.
The direction of gold hinges on the U.S. inflation data. If the data shows stronger-than-expected job growth, it could signal higher inflation, which is not good for gold.
An optimistic U.S. jobs report last week tempered expectations of a Federal Reserve interest rate cut in March. The U.S. Consumer Price Index (CPI) report, expected at 13:30 GMT, is anticipated to show flat headline inflation for November, with core inflation remaining at 4% annually—well above the Fed's 2% target.
The Federal Reserve's monetary policy meeting concludes on Wednesday, with expectations that interest rates will remain at 5.25%-5.50%. There is a 77% chance of a rate cut in May, according to the CME FedWatch Tool.
Lower interest rates typically benefit gold, which doesn't pay interest.
In addition, the European Central Bank and the Bank of England will have policy meetings on Thursday, adding to the factors influencing gold's direction.
