Gold prices edged up in early trading hours on Tuesday, with investors looking ahead of key economic reports later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures were down by 0.23 percent to trade at $1,276.30 a troy ounce as of 05:15 GMT.
The yellow metal settled to the downside on Monday, trading near breakeven most of the day despite a continuous weakening of the US dollar, in which gold is denominated. A weaker currency usually benefits the metal as it becomes cheaper for investors holding foreign currency.
On Monday, gold futures traded in a tight range between $1,268.40 and $1,270.31 a troy ounce, with the US dollar index remaining close to its lowest level in fourteen months.
Investors are closely monitoring the political scene in Washington and the ongoing geopolitical crisis in the Korean peninsula. There are rising concerns about the ability of the current administration to impose its economic agenda in Congress, including the AHCA and tax reform.
In the meantime, President Donald Trump criticized China’s inaction on the North Korean crisis, saying it will be no longer tolerate it and that is a big disappointment for him.
Ahead in the session, traders will be looking at the core PCE price index, personal consumption and ISM manufacturing PMI. Inflation data plays a huge role for the Federal Reserve and expectations for a third rate hike later this year.
According to Fed funds tracked by CME Group’s FedWatch program, traders are currently pricing in a 42.5 percent probability for a rate hike by December.