Gold prices increased slightly as the market focused on US inflation data

Gold prices recovered slightly after the sharp decline in the previous session, as investors waited for US inflation data for more clues on the interest rate cut roadmap of the US Federal Reserve (FED).

At 6:38 GMT (ie 1:48 p.m. - Vietnam time), spot gold prices increased by 0.1% to $3,348.41/ounce. December gold futures in the US fell 0.2% to $3,397.1 an ounce.

Gold prices fell 1.6% on Monday while futures fell more than 2% after US President Donald Trump said he would not impose tariffs on imported gold bars, thereby easing concerns in the market.

Kelvin Wong, senior market analyst at OANDA, said: Investors will now definitely focus on the upcoming Fed rate cut, which has been largely priced by the market for September. If the upcoming core CPI data is slightly lower than expected, it could further strengthen that expectation.

This will reduce the cost of holding gold, while the yield on the 10-year US Treasury note remains below some important resistance levels, so it could continue to support gold prices.

All eyes are on the US consumer price index (CPI) data, due at 12:30 GMT. A recent survey shows that the core CPI in July could increase by 0.3%, bringing the annual increase to 3%, higher than the Fed's 2% target.

According to the CME FedWatch tool, traders are pricing in an 85% chance of the Fed cutting interest rates next month. Gold often has a positive performance in uncertainty and a low interest rate environment.

The market has been largely unresponsive to a statement from a White House official that Trump signed an executive decree on Monday, extending a further 90 days of postponing high tariffs on imports from China.

In other precious metals markets, spot silver rose 0.7% to $37.89/ounce, platinum rose 0.4% to $1,331.50/ounce, and gold rose 0.8% to $1,145.03/ounce.