Gold prices edged higher on Tuesday as the dollar index extended its pullback from a 20-year high.
Spot gold edged up 0.3 percent to $1,714.90 per ounce, while U.S. gold futures were up 0.2 percent at $1,712.85.
The dollar index was down for the third consecutive day, hitting a one-week low in European trade, after several Federal Reserve officials said that the U.S. central bank will likely stick to its decision for a 75-bps rate hike this month.
The dollar was also pressured by new reports suggesting that ECB policymakers will discuss whether to raise rates by 25 or 50 points at their meeting on Thursday to tame record-high inflation.
On the data front, Eurostat data showed that the region's inflation accelerated as estimated in June to set a fresh record high, driven by higher energy and food prices. Headline consumer price inflation surged to 8.6 percent from 8.1 percent in May.
In the U.K., stronger-than-expected U.K. jobs data heightened fears of more interest-rate hikes.
The ILO unemployment rate came in at 3.8 percent in three months to May, unchanged from three months to April but down by 0.1 percentage points on the quarter. The rate was forecast to rise to 3.9 percent.
U.S. building permits and housing starts data for June are set for release in the New York session.
