Gold prices were slightly higher on Tuesday and the dollar weakened as investors awaited cues from U.S. inflation data later in the day and the Fed's monetary policy announcement on Wednesday.
Spot gold edged up 0.2 percent to $1,986.01 per ounce while U.S. gold futures were up 0.4 percent at $2,001.15.
Trading later in the day will be driven by reaction to a report on U.S. CPI data for November that may show inflation still cooling but staying well above the Fed's 2 percent annual target.
The Federal Reserve is widely expected to hold rates on Wednesday, with the spotlight squarely on the central bank's dot plot and summary economic projections as well as comments from Chair Jerome Powell during his press conference.
Reports on producer price inflation along with reports on retail sales and industrial production will be in focus later in the week after last Friday's strong than expected jobs data forced traders to lower bets for U.S. rate cuts to May from March 2024.
The European Central Bank (ECB), Bank of England (BoE), Norges Bank and the Swiss National Bank all will announce their monetary policy decisions on Thursday.
Analysts currently expect the ECB to announce its first interest-rate cut in June 2024. The BoE may announce its first rate cut in August.
