Gold prices eased on Wednesday and the dollar index held firm, as investors looked to upcoming U.S. inflation data and a European Central Bank (ECB) policy meeting for directional cues.
Spot gold slid 0.2 percent to $1,889.98 per ounce, while U.S. gold futures were down 0.1 percent at $1,891.95.
U.S. benchmark 10-year Treasury yields held near their lowest in more than a month, helping limit the downside momentum.
Amid ample chatter about rising inflation, the release of key U.S. consumer inflation data on Thursday may provide some cues on policy tapering.
U.S. Treasury Secretary Janet Yellen on Sunday noted that a slightly higher interest-rate environment “would actually be a plus for society’s point of view and the Fed’s point of view”.
Data released earlier today showed that China’s factory gate prices rose at their fastest annual pace in over 12 years in May on the back of surging commodity prices.
The Bank of Canada is scheduled to announce its decision on interest rates at 10.00 am ET. Economists forecast the benchmark rate to hold at 0.25 percent.
The European Central Bank is likely to maintain a higher pace of asset purchases for another quarter when it reviews monetary policy on Thursday.