Gold approaches highest level in 3 weeks amid weaker Dollar

Shafaq News / Gold prices climbed to a near three-week high on Tuesday as the dollar slipped to a two-month low, while investors positioned for the U.S. inflation data that could have a bearing on the Federal Reserve's rate hike path.

Spot gold rose 0.6% to $1,935.99 per ounce by 0821 GMT. U.S. gold futures gained 0.6% to $1,941.60.

"The reaction to the US inflation data is dependent on how fast it is slowing down... only if inflation surprises on the downside gold would benefit, as it would indicate a sooner end in the Fed hiking cycle," UBS analyst Giovanni Staunovo said.

Safe-haven gold tends to gain during times of economic or financial uncertainty, while lower rates also lift the appeal of the zero-yield asset.

Bullion is being supported by a weaker dollar as the Fed seems to imply that they're at the end of the tightening cycle, "but gold bugs appear hesitant to over-commit ahead of Wednesday's U.S. inflation report," said Matt Simpson, senior market analyst at City Index.