Gold prices edged higher on Tuesday after hitting a three-week low in the last session, as the dollar eased, while investors awaited key U.S. inflation data and major central bank policy meetings for interest rate clues.
FUNDAMENTALS
* Spot gold was up 0.2% at $1,985.49 per ounce as of 0113 GMT, after hitting its lowest since Nov. 20 on Monday. U.S. gold futures rose 0.4% to $2,000.60.
* The dollar index was down 0.1% against its rivals, making gold less expensive for other currency holders.
* Economists polled by Reuters expect U.S. headline inflation to be flat for November, and core inflation to be steady at an annual pace of 4% – well above the Federal Reserve’s 2% target. The U.S. Consumer Price Index (CPI) report is due at 1330 GMT on Tuesday.
* The path U.S. consumers expect inflation to take over the next year softened in November to the lowest level in more than two years, a New York Fed survey showed on Monday.
* 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 about a 77% chance of a rate cut in May, according to CME FedWatch Tool.
* Lower interest rates tend to support non-interest-bearing bullion.
* The European Central Bank and the Bank of England will also conduct policy meetings on Thursday.
* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.23% to 878.54 tons on Monday from 880.55 tons on Friday.
* Spot silver rose 0.1% to $22.81 per ounce, while platinum was steady at $910.51 and palladium climbed 0.6% to $962.89 per ounce.
