Gold prices up on lower dollar, inflation data in focus

Gold prices rose today, Tuesday, with the decline of the dollar, as investors assess US inflation data, which could determine the next steps for the monetary policy of the Federal Reserve (US Central Bank).

According to Reuters, gold rose in spot trading by 0.5 percent to $1,861.93 an ounce by 0645 GMT, after falling to its lowest level since early January in the previous session.

Gold is highly sensitive to rising interest rates, as this increases the opportunity cost of owning that non-returnable asset.

Investors are eagerly awaiting US consumer price index data for January, which is scheduled to be released later in the day. Economists polled by Reuters expected the core consumer price index to rise by 0.5 on a monthly basis

Financial markets expect the target interest rate for the Federal Reserve to peak at 5.188 percent in July, compared to the current range of 4.5 to 4.75 percent.

The dollar index fell 0.2 percent, making gold priced in the US currency less expensive for buyers who hold other currencies.