Gold prices dip as investors await US inflation data

Spot gold slipped 0.4% to $4,124.42 per ounce on Tuesday, after a more than 1% rally the day before, as investors took profits and looked ahead to US inflation figures. US gold futures for December delivery rose 0.5% to $4,133.00.

"It's just a bit of churn in the market. Prices are easing back from the highs reached during the US session, which could be attributed to profit-taking," said Kyle Rodda, senior financial market analyst at Capital.com.

Rodda added that a de-escalation of Middle East tensions and falling oil prices could benefit gold by influencing the dollar, inflation and interest-rate expectations.

Federal Reserve officials signaled caution on policy. Richmond Fed President Tom Barkin said the central bank must move "with care" as it addresses inflation, the Fed’s primary risk, and noted no clear base case for action at the December meeting. CME's FedWatch tool shows traders assign an 84% probability to a rate increase in December, a move that would raise the opportunity cost of holding non-yielding bullion.

The market now awaits the consumer price index report later in the day, followed by producer price index data on Friday. In related metals, spot silver fell 0.3% to $53.22 per ounce, platinum held at $1,577.57, and palladium slipped 0.2% to $1,039.16.