Gold prices fell on Tuesday as the US dollar strengthened, with investors awaiting the release of US inflation data later in the week.
Spot gold was down 0.3% at $1,923.50 per ounce by 2:30 pm ET (1830 GMT), while US gold futures fell 0.2% to $1,937.50.
The US dollar index, which measures the greenback against a basket of six major currencies, rose 0.2% to 104.91. A stronger dollar makes gold more expensive for investors holding other currencies.
The US Labor Department is due to release its Consumer Price Index (CPI) data on Wednesday. Economists expect the CPI to rise 0.6% in August, after rising 0.5% in July.
A higher-than-expected inflation reading could boost gold prices, as it would increase the likelihood of the Federal Reserve raising interest rates more aggressively in the future.
However, a lower-than-expected inflation reading could weigh on gold prices, as it would reduce the need for the Fed to raise rates.
“The market is waiting for the CPI report to make a decision on gold prices,” said Naeem Aslam, chief market analyst at AvaTrade. “If the inflation data comes in higher than expected, then gold prices could rise. However, if the data comes in lower than expected, then gold prices could fall.”
The gold market is also being influenced by the ongoing conflict between Russia and Ukraine. The conflict has raised concerns about global economic growth and inflation, which could support gold prices.
However, the conflict has also led to safe-haven demand for the US dollar, which could weigh on gold prices.
Overall, the gold market is likely to remain volatile in the near term, as investors assess the latest economic data and geopolitical developments.