Gold prices held firm above the $2,500 level on Tuesday as market participants positioned themselves ahead of U.S. inflation data for further clues on the depth of interest rate cuts by the Federal Reserve next week, report Reuters.
Spot gold rose 0.3 per cent to $2,513.07 per ounce by 9:10 a.m. ET (1310 GMT). U.S. gold futures were up 0.4 per cent at $2,542.10.
"Gold prices are trading in an extremely tight range, waiting for the next catalyst, which are likely to be both the U.S. presidential debate tonight, followed shortly by inflation data tomorrow," said Daniel Ghali, commodity strategist at TD Securities.
The investors will closely scan through U.S. Consumer Price Index data on Wednesday and the Producer Price Index reading on Thursday.
The CPI for August is expected to have risen by 0.2 per cent month-over-month, unchanged from the previous month, according to a Reuters poll.
"Spot gold remains supported above the psychological $2,500 level, and any post-CPI forays below that big, round number should see bulls buying the dip once more, as they have consistently done since mid-August," said Han Tan, chief market analyst at Exinity Group.
So far this year, gold has gained 21 per cent, hitting an all-time high of $2,531.60 on Aug. 20.
Lower interest rates reduce the opportunity cost of holding zero-yield bullion.
Markets are currently pricing in a 73 per cent chance of a 25 basis point U.S. rate cut at the Fed's Sept. 17-18 meeting, and a 27 per cent chance of a 50 bps cut, the CME FedWatch tool showed.
Spot silver rose 0.3 per cent to $28.43 per ounce.
Platinum gained 0.9 per cent to $946.75 and palladium was up by 1.2 per cent to $957.58.
