Investing.com - Gold prices pushed higher during Europe's session on Tuesday, as a pullback in the U.S. dollar from a seven-month peak boosted the appeal of the precious metal.
Gold for December delivery on the Comex division of the New York Mercantile Exchange tacked on $5.80, or 0.47%, to $1,262.55 a troy ounce by 3:25AM ET (07:25GMT). A day earlier, the yellow metal inched up $1.10, or 0.09%.
The U.S. dollar index, which measures the greenback's value against a basket of six major currencies, was down 0.15% at 97.71 early Tuesday, moving away from the prior session's more than seven-month high of 98.15.
U.S. inflation data will be in the spotlight on Tuesday, as investors attempt to gauge if the world's largest economy is strong enough to withstand an increase in borrowing costs before the end of the year.
The Commerce Department will publish September inflation figures at 8:30AM ET (12:30GMT). Market analysts expect consumer prices to ease up 0.3%, while core inflation is forecast to increase 0.2%.
On a yearly base, core CPI is projected to climb 2.3%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Fed toward raising interest rates.
Markets are currently pricing in around a 70% chance of a rate hike at December's meeting, according to Investing.com's Fed Rate Monitor Tool.
On Monday, Fed Vice Chair Stanley Fischer said the U.S. central bank is "very close" to its employment and inflation targets, while Boston Fed President Eric Rosengren said the current levels of jobs and inflation support the case for a rate increase soon.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.
Also on the Comex, silver futures for December delivery rose 19.8 cents, or 1.13%, to trade at $17.67 a troy ounce during morning hours in London, while copper futures added 1.2 cents, or 0.57%, to $2.119 a pound.