Gold edged higher on Tuesday and the dollar index eased slightly as investors awaited U.S. inflation data due later in the day, which could shed more light on the U.S. Federal Reserve’s timeline for reducing the asset purchase program.
Spot gold edged up 0.1 percent to $1,808.29 per ounce, while U.S. gold futures were up 0.1 percent at $1,808.50.
As the economy rebounds and due to the so-called base effect, U.S. consumer price inflation in June is expected to have risen 0.5 percent from May and 4.9 percent from a year earlier.
Meanwhile, Fed Chair Jerome Powell is scheduled to testify on the semi-annual monetary policy report before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.
The testimony will be closely watched for his response to the inflation data.
James Bullard, the president of the St. Louis Fed, told the Wall Street Journal in an interview that the Federal Reserve should start reducing the stimulus it provides to the U.S. economy, but the reduction need not start immediately.