Gold prices edged higher on Tuesday as the dollar weakened ahead of the release of US inflation data, increasing the appeal of the metal for holders of other currencies.

Spot gold rose 0.2% to $1,808.70 per ounce by 0356 GMT, while US gold futures were 0.2% higher at $1,809.80. The dollar index edged 0.1% lower against rivals.

Investors will closely watch for the US consumer price index (CPI) report, due at 1230 GMT, which could shed more light on the US Federal Reserve's timeline for tightening its policy stance.

Attention is then expected to shift to Fed Chairman Jerome Powell's testimony before Congress on Wednesday and Thursday for his response to the inflation data.

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The CPI data is going to frame the perception the market has regarding Powell's testimony, said IG Market analyst Kyle Rodda.

"I think the Fed is edging closer towards that desire to warm the market up to policy normalisation and if they continue along that path or accelerate along that path, that's going to be a headwind for gold," Rodda said.

Last month, the metal posted its biggest monthly drop since November 2016 following a surprise hawkish shift by the US central bank.

Prices, however, have stabilised since then with Powell saying the central bank would not raise interest rates too quickly based only on the fear of coming inflation and would aim for a "broad and inclusive" recovery of the job market.

A drop in benchmark 10-year Treasury yields last week to the lowest in nearly five months also helped the non-yielding metal.

"Barring unexpected news, I expect gold to consolidate and trade in a range of $1,800/oz to $1,820/oz over the coming week," said Michael Langford, director at corporate advisory AirGuide.

Elsewhere, silver edged 0.2% higher to $26.22 per ounce, palladium fell 0.3% to $2,848.90 and platinum rose 0.2% to $1,119.32.