BENGALURU: Gold prices edged higher on Tuesday as caution set in ahead of a US inflation report that could offer more clues on the timing of widely expected interest rate cuts from the Federal Reserve.

Spot gold was up 0.4% at $2,027.99 an ounce by 1145 GMT, having briefly slipped to a more than two-week low of $2,011.72 in the previous session.

US gold futures were up 0.4% at $2,041.80. All eyes are on the January US consumer price index (CPI) inflation data due at 1330 GMT. American consumer expectations were for a fairly stable inflation outlook for the start of the year, a New York Fed survey showed. Wall Street economists expect the CPI to have dropped to 2.9% from 3.4% the previous month, a Reuters poll showed.

Lower CPI readings will support gold in anticipation of an earlier cut to interest rates, said UBS analyst Giovanni Staunovo. “We continue to see price dips below $2,000/ounce as an opportunity to add exposure to gold in anticipation of higher prices at the end of this year,” he said.

Several US Fed officials, including Chairman Jerome Powell, last week said they want to see more evidence that inflation will continue to decline before cutting rates.

Traders see about a 56% chance of a rate cut in May, according to the CME Fedwatch tool. Retail sales data on Thursday and producer price index (PPI) numbers on Friday are also on the radar while markets also await comments from a slew of Fed officials this week.

In other precious metals, spot platinum was up 0.9% at $897.10 an ounce, palladium rose 1.8% to $908.05 and silver gained 0.8% at $22.88.