Gold rose in daily trading on Monday as market participants awaited the August inflation report in the United States and looked at the Federal Reserve's (Fed) next indication of whether to cut rates by 50 or 25 basis points.
At 9.15am, the price of gold was at $2,505.34, down a slight 0.05% since it opened in early Asian trade on Tuesday.
Gold market sentiment improved during the overnight session following strengthening in US equities and Treasury bond yields retreated somewhat along the curve with the 10-year note yielding 3.706% unchanged from Friday.
Meanwhile, markets are now discounting the possibility of a 50 basis point rate cut following Friday's Non-farm Payrolls (NFP) figures despite missing signs that the Unemployment Rate ticked lower from 4.3% to 4.2%.
Now, eyes are focused on the release of the Consumer Price Index (CPI) which is expected to decline further towards the Fed's 2% target.
The CME FedWatch tool shows that the odds for a Fed rate cut of 25 basis points rose to 73% and the odds for a 50 basis point lay at 27%.
Earlier, US economic data showed the New York Fed's inflation expectations report that prices remained anchored at the 3% threshold and unchanged from the previous survey although slightly above the Fed's target.
