BENGALURU: Gold prices edged up on Tuesday despite a higher dollar as investors awaited key US inflation data and the conclusion of the US Federal Reserve’s two-day meeting on Wednesday.

Spot gold rose 0.2% to $2,314.45 per ounce by 1434 GMT. US gold futures rose 0.2% to $2,331.90. “We are in a situation where there’s still safe haven demand for safer assets, and it is one of those strange situations where both the dollar and gold can move in the same direction,” said Everett Millman, chief market analyst with Gainesville Coins.

The dollar index hovered near a one-month peak hit earlier in the session. The market is now awaiting the May consumer price index inflation report due on Wednesday, and the conclusion of the Fed’s two-day meeting on the same day.

The US Federal Reserve will cut its key interest rate in September and once more this year, according to a majority of forecasters in a Reuters poll that also showed a significant risk they opt for only one or none at all. High interest rates make bullion less appealing against yielding assets such as bonds.

“The next key level is on the downside, just above $2300. If gold falls below that, it’s much more likely that gold falls further and retests the $2200 level,” Millman added.

Led by US jobs data and news that China’s central bank held off on gold purchases to its reserves in May, prices dropped by over 3.5% on Friday, marking bullion’s sharpest daily drop since November 2020. However, China is expected to resume its bullion shopping spree once prices ease from the record highs hit in May, industry players said at a conference this week.

Among other metals, spot silver fell 1.7% to $29.26 per ounce, platinum was down 1.4% at $953.87 and palladium lost 2.1% to $885.06.