Investing.com - Gold gained in Asia on Tuesday with investors looking ahead to data on U.S. consumer prices for indications on the likely path of Federal Reserve interest rate moves this year.
On the Comex division of the New York Mercantile Exchange, gold for June delivery rose 0.17% to $1,276.35 a troy ounce.
Silver for July delivery gained 0.21% to $17.190 a troy ounce. Copper for July delivery inched up 0.10% to $2.093 a pound.
Overnight, gold ticked up on Monday to reach a one-week high, ahead of the release of key consumer price data in the U.S., as downbeat manufacturing and soft producer prices in Japan lowered sentiments on an impending rebound in the global economy.
Gold extended previous gains on Monday morning after the Federal Reserve Bank of New York said its Empire State Manufacturing Index in May has fallen 9.02 points, halting a brief run of monthly gains over the prior two months. Weakness in new orders and inventories dragged down the overall reading, while shipments turned lower in May creating further declines. Analysts expected an increase of 7.00, following a 9.56 gain in April.
Elsewhere, Goldman Sachs Group Inc (NYSE:NYSE:GS) warned that the S&P 500 Composite index could fall anywhere between 5 and 10% in the near-term future, amid signs of a weakening global economy. The major Wall Street bank cited elevated stock valuations, the U.S. presidential election and further tightening from the Federal Reserve in its reasoning. Gold is viewed as a safe-haven asset for investors in periods of increased economic uncertainty.
Investors await Tuesday's release of the Consumer Price Index (CPI) for April for further indications on the timing of the Federal Reserve's first interest rate hike in 2016. Analysts are predicting a mild increase of 0.3% in April CPI, in response to a 0.1% gain in March. The Core CPI Index, which strips out volatile food and energy prices, is expected to tick up by 0.2%. Since raising interest rates for the first time in seven years in December, the Fed has been hesitant to tighten its money policy cycle even further amid sluggish inflation.
Any rate hikes by the Fed this year are viewed as bearish for gold, which struggles to compete with high yield bearing assets in rising rate environments.