BENGALURU: Gold prices held steady on Tuesday, buoyed by a slight pullback in the dollar as investors look forward to US inflation data due later this week for more clarity on interest rate cut timings. Spot gold was flat at $2,349.78 per ounce by 10:16 a.m. ET (1416 GMT), after rising 1% on Monday. US gold futures were up 0.7% at $2,350.20.

“The dollar index is down and we are seeing the yield curve rates drop a little bit. Gold is coming off a correction and is hovering around resistance levels and now it’s bouncing again,” said Bart Melek, head of commodity strategies at TD Securities.

“We continue to be fairly optimistic on gold. I still think that ambiguity of Federal Reserve monetary policy may very well keep gold from taking off and moves be very much data dependent going forward.” The dollar slipped 0.1% to a more than one-week low, making gold less expensive for other currency holders.

Focus this week will be on the US core personal consumption expenditures price index (PCE), the Fed’s preferred inflation gauge, due on Friday. Fed meeting minutes released last week showed that the policy response, for now, would involve maintaining the benchmark rate at its current level.

Traders are pricing in about a 63% chance of a Fed rate cut by November. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

“Gold prices are likely to remain fairly supported by buying-on-dips demand and central bank diversification,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China International.

Demand from global central banks for gold has been elevated for two years as they diversify their foreign currency reserves.

Meanwhile, global physically-backed gold exchange-traded funds (ETFs) saw net outflows of 11.3 metric tons last week, according to the World Gold Council.

Silver eased 0.1% to $31.64 after a 4.4% jump on Monday. Platinum fell 0.8% to $1,045.56. Palladium slipped 1.7% to $972.