Gold Edges Higher From A One-month Low As CPI Data Approaches

Gold prices recovered marginally from a one-month low on Tuesday, but investors remained on the sidelines in anticipation of further economic signals from U.S. consumer inflation data anticipated later in the day.

Most other commodity prices also remained inside narrow trading ranges, while the dollar remained stable despite concerns that inflation might surprise to the upside, prompting the Federal Reserve to increase interest rate rises.

At 19:32 EDT, spot gold increased 0.1% to $1,855.58 per ounce, while gold futures jumped 0.1% to $1,865.95 per ounce (00:32 GMT). On Monday, when markets became turbulent in anticipation of the consumer price index data, both instruments declined.

Inflation is anticipated to have declined more in January compared to the previous month, but to stay at rather high levels. This trend may provide the Fed with sufficient fuel to sustain its hawkish stance.

In 2022, the opportunity cost of keeping non-yielding assets climbed in parallel with U.S. Treasury yields, which negatively impacted gold prices. While the yellow metal did see a brief reprieve in the first few weeks of 2023, growing concerns about the Federal Reserve wiped out the majority of its previous gains.

In recent sessions, a surge in short-term Treasury rates and a comeback in the dollar, which lingered near a one-month high versus a basket of currencies both weighed on metal prices. The dollar sank marginally on Tuesday as a result of profit-taking.

Additionally, other precious metals were subdued on Tuesday. Futures for platinum increased 0.1% to $961.15 per ounce, while futures for silver remained stable at $21.992 per ounce.

Copper prices declined following big increases in the previous day, as traders continued to assess the likelihood of a Chinese demand rebound against concerns of a worldwide recession this year.

Futures for high-grade copper slipped 0.1% to $4.0585 a pound after gaining more than 1% in the previous session.

In recent weeks, the price of copper has fluctuated wildly due to conflicting indications regarding the economic recovery in China, the world's largest copper importer.

Fears of a slowdown in other major economies, notably the United States and the euro zone, have been a big headwind for pricing.