Gold prices crept lower on Tuesday on a firmer dollar as investors waited for U.S. consumer price data due later in the day to gauge the outlook for inflation and the Federal Reserve's rate hike stance.
Spot gold dipped 0.1 percent to $1,321.34 per ounce at 03:59 GMT.
U.S. gold futures for April delivery rose 0.1 percent to $1,321.60 per ounce.
The dollar index, which measures the U.S. Dollar against a basket of currencies, was up 0.1 percent at 89.977.
traders are adopting a more neutral stance ... While a March hike is
fully priced in, traders usually get a bit anxious awaiting the Fed
statement and key forward guidance," said Stephen Innes, APAC trading
head at OANDA.
"We should expect interest rate uncertainty to weigh on prices over the short term."
U.S. government is expected to release consumer price index (CPI) data
at 12:30 GMT, a key focus for the day. The median forecast by economists
polled by Reuters points to annual core CPI inflation of 1.8 percent in
February, which would be flat from January.
A higher reading
could stoke expectations that the Federal Reserve will likely raise
interest rates four times, rather than three times, this year. Higher
interest rates increase the opportunity cost for non-yielding bullion.
outcome above expectations will put gold under pressure, said Richard
Xu, a fund manager at HuaAn Gold, China's biggest gold exchange-traded
In the longer term, Xu expected gold to be range bound this
year, although an expected slowdown in the Chinese economy will provide
In February, growth in China's manufacturing sector
cooled to the weakest in over 1-1/2 years, raising concerns of a
sharper-than-expected slowdown in the world's second biggest economy
this year as regulators tighten the screws on financial risks.
gold looks neutral in a range of $1,318-$1,327 per ounce and an escape
could suggest a direction, according to Reuters Technical analyst, Wang
In other precious metals, silver rose 0.2 percent to $16.52 per ounce.
fell 0.4 percent, to $959.00 per ounce, the highest since Sept. 8,
while palladium remained unchanged at $978.50 per ounce.