Gold prices rose in European trade on Tuesday, holding above two-week lows near $3200 as the dollar stalled against major rivals.

It comes ahead of important US inflation data, which will showcase the impact of US tariffs on consumer prices and could impact the future path of Fed interest rates.

Prices

Gold prices  rose 0.9% today to $3265 an ounce, with a session-low at $3216.

On Monday, gold lost 2.7%, the third loss in four days away from a two-week trough at $3207.

The loss came as haven demand tumbled and the dollar rallied following the US-China trade deal.

US Dollar 

The dollar index fell 0.25% on Tuesday away from a five-week high at 101.98 against a basket of major rivals.

The dollar lost ground as traders shunned new positions before crucial US inflation data for April.

US Rates

Fed official Adriana Kugler said that Trump’s trade policies will likely raise inflation and impact growth negatively, despite the latest tariff pause.

Cleveland Fed President Beth Hammock said the Fed requires more time to assess the impact of Trump’s tariffs before deciding on the suitable response.

According to the Fedwatch tool, the odds of a 0.25% Fed rate cut in June stand at just 12%. 

The odds of 0.25% Fed rate cut in July stood at 40%.

Traders now wait for major April inflation data for the US to gather more clues.

US consumer prices are expected up 2.4% y/y in April, same as before, while core prices are expected up 2.8%.

SPDR

Gold holdings at the SPDR Gold Trust rose 1.15 tons yesterday to a total of 939.09 tons.

UK wages rose 5.5% in the three months ending February, above estimates of 5.2%, and slowing down from the previous reading's 5.7% increase. 

UK jobless claims rose 5.2 thousand in April, below estimates of 22.3 thousand, and compared to March's 18.7 thousand increase. 

UK unemployment rise 4.5% in the three months ending March, matching expectations, and up from 4.4% in the previous reading.