Gold prices moved in a narrow range on Tuesday, May 9, ahead of US inflation data, which investors are looking for clues to the US Federal Reserve's policy path.
Gold in spot transactions remained unchanged at $2,023.41 an ounce, and by 02:32 GMT, US gold futures fell 0.2%, to $2,030.10.
US Consumer Price Index data is scheduled for release on Wednesday.
Ajay Kedia, director at Kedia Commodities in Mumbai, said that if the inflation report is released in a way that fuels fears of another rate hike in June, gold prices may eventually fall to a level between $1950 and $1920.
Bullion is a hedge against inflation, but high interest affects the attractiveness of non-return assets.
Dealers are currently betting 92% that the US Federal Reserve will keep interest rates at their current level in June.
The New York Fed report showed that inflation expectations for US consumers were mixed in April.
Besides economic data, market participants are also watching developments surrounding the US banking sector and debt ceiling.
US Federal Reserve data released on Monday showed in the latest indication that higher bank interest rates are starting to bear fruit in the financing sector.
Kedia added: If there is news of more pressure in the banking sector, we will see gold moving towards the $2100 level.
Treasury Secretary Janet Yellen said on Monday that Congress' failure to raise the $31.4 trillion federal debt limit would deal a massive blow to the US economy and weaken the dollar's position as the world's reserve currency.
As for other precious metals, silver rose in spot transactions by 0.2%, to $25.61 an ounce.
Platinum also rose 0.2% to $1,073.23, and palladium fell 0.3% to $1,548.58.
