<p>Gold prices were trapped in a tight range as investors awaited US inflation data on Tuesday that could provide more clarity on the Federal Reserve's timeline for policy tightening.</p>.<p>Spot gold was up 0.1 per cent at $1,808.20 per ounce by 0854 GMT (2:24 pm). US gold futures were 0.2 per cent higher at $1,808.70.</p>.<p>"If we get a slightly hotter inflation print today that could exert upward pressure on the US 10-year yields, which in turn could exert downward pressure on gold," said CMC Markets UK's chief market analyst Michael Hewson.</p>.<p>After the US consumer price index due for release at 1230 GMT (5:30 pm), the focus turns to Fed Chairman Jerome Powell's testimony before Congress on Wednesday and Thursday for his response to the inflation data and possible tapering measures.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/business/oil-rises-on-expectations-of-us-crude-stocks-falling-1008007.html" target="_blank">Oil rises on expectations of US crude stocks falling</a></strong></p>.<p>Following a hawkish tilt from the US central bank last month, Powell said the Fed would not raise interest rates too quickly based only on the fear of coming inflation.</p>.<p>Though gold is considered a hedge against inflation, a Fed rate hike would dull its appeal as that increases the opportunity cost of holding the non-yielding metal.</p>.<p>The dollar index edged 0.1 per cent against rivals, making gold less appealing for other currency holders.</p>.<p>"The fact that the Fed and the ECB are likely to diverge when it comes to monetary policy over the course of the next 6 to 12 months, there is a potential for the dollar to go higher and that could constrain to a certain extent the upside in gold prices," Hewson added.</p>.<p>The European Central Bank has pledged to be "persistent" and will not repeat its past mistake of tightening policy too early, its president Christine Lagarde said on Tuesday.</p>.<p>Elsewhere, silver rose 0.2 per cent to $26.23 per ounce, palladium fell 0.8 per cent to $2,833.41 and platinum eased 0.1 per cent to $1,116.19.</p>
<p>Gold prices were trapped in a tight range as investors awaited US inflation data on Tuesday that could provide more clarity on the Federal Reserve's timeline for policy tightening.</p>.<p>Spot gold was up 0.1 per cent at $1,808.20 per ounce by 0854 GMT (2:24 pm). US gold futures were 0.2 per cent higher at $1,808.70.</p>.<p>"If we get a slightly hotter inflation print today that could exert upward pressure on the US 10-year yields, which in turn could exert downward pressure on gold," said CMC Markets UK's chief market analyst Michael Hewson.</p>.<p>After the US consumer price index due for release at 1230 GMT (5:30 pm), the focus turns to Fed Chairman Jerome Powell's testimony before Congress on Wednesday and Thursday for his response to the inflation data and possible tapering measures.</p>.<p><strong>Also Read | <a href="https://www.deccanherald.com/business/oil-rises-on-expectations-of-us-crude-stocks-falling-1008007.html" target="_blank">Oil rises on expectations of US crude stocks falling</a></strong></p>.<p>Following a hawkish tilt from the US central bank last month, Powell said the Fed would not raise interest rates too quickly based only on the fear of coming inflation.</p>.<p>Though gold is considered a hedge against inflation, a Fed rate hike would dull its appeal as that increases the opportunity cost of holding the non-yielding metal.</p>.<p>The dollar index edged 0.1 per cent against rivals, making gold less appealing for other currency holders.</p>.<p>"The fact that the Fed and the ECB are likely to diverge when it comes to monetary policy over the course of the next 6 to 12 months, there is a potential for the dollar to go higher and that could constrain to a certain extent the upside in gold prices," Hewson added.</p>.<p>The European Central Bank has pledged to be "persistent" and will not repeat its past mistake of tightening policy too early, its president Christine Lagarde said on Tuesday.</p>.<p>Elsewhere, silver rose 0.2 per cent to $26.23 per ounce, palladium fell 0.8 per cent to $2,833.41 and platinum eased 0.1 per cent to $1,116.19.</p>