Gold prices as of today stabilized in a narrow range on Tuesday as investors refrained from betting heavily ahead of a key U.S. CPI data release that could affect the size of the Federal Reserve’s future interest rate moves.

Gold prices and inflation

The spot gold price rose 0.26% to $1,728.6 a troy ounce. Prices hit a two-week high of $1,734.99 on Monday as the dollar fell.

“This will be the last batch of important data to come out before next week’s Fed meeting, so all eyes will be on it, and prices are likely to remain flat until then,” said Ricardo Evangelista of ActivTrades.

“A 75 basis point rate hike (at the September 20-21 Fed meeting) is already built into the value of the dollar, so it’s unlikely to have a significant impact on the dollar and therefore on gold,” Evangelista added, noting that lower-than-expected inflation numbers could create opportunities for gold to rise.

Although gold is seen as a hedge against inflation, higher interest rates increase the cost of owning bullion. Silver rose 0.35% to $19.85 an ounce. Platinum rose 0.67% to $913.05 and palladium fell 2.77% to $2,202.46 an ounce.

Earlier we reported that the dollar is declining in anticipation of U.S. inflation data.