Gold edges lower as focus shifts to US inflation data

Gold prices eased on Tuesday as investors took profits after bullion's more than 1% rally in the previous session, ahead of US inflation data that could offer clues on the Federal Reserve's policy path.

Spot gold was down 0.6% at $4,115.12 ​an ounce, as of 0238 GMT. US gold futures for December delivery edged 0.2% higher ​to $4,123.90.

"It's just a bit of churn in the market. Prices are ⁠easing back from the highs reached during the US session, which could be attributed ​to profit-taking," said Kyle Rodda, senior financial market analyst at Capital.com.

"If we continue to ​see a situation where the US does not want to escalate the conflict in the Middle East and oil prices are reversing as a result, that'd be very beneficial for gold because of ​its impact on the dollar, inflation and interest rate expectations," Rodda said.

US President Donald ​Trump said on Monday he plans to hold off on new military strikes against Iran for the ‌time ⁠being after appeals from countries in the region, including from Qatar's prime minister in White House talks. Oil prices edged lower on Tuesday, extending losses from the previous day.

Meanwhile, the US central bank should move its monetary policy "with care" as it maps a response to inflation, which remains its greatest risk, Richmond Federal Reserve President Tom Barkin said on Monday, adding he had no base case for what it should do at the December meeting.

Traders currently see an 84% chance that the US Fed will raise rates in December, according to CME's FedWatch tool.

Higher interest rates increase the opportunity cost of holding non-yielding bullion, reducing its appeal to investors.

Investors now await the consumer price index (CPI) report later ⁠today, followed by producer price index (PPI) data on Friday.

Among other metals, spot silver slid 0.6% to $53.04 per ounce, platinum dipped 0.3% to $1,571.70 and palladium dropped 0.4% to $1,037.50.

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