WASHINGTON (dpa-AFX) - Gold prices were subdued on Tuesday ahead of the release of key U.S. inflation readings this week that could influence the Fed's rate trajectory.
Spot gold dipped half a percent to $2,460.35 per ounce while U.S. gold futures were down 0.2 percent at $2,500.10.
The dollar gained after Ukraine said it has seized 1,000 sq km (386 square miles) of Russia's bordering Kursk region and Russian President, Vladimir Putin, vowed a 'worthy response' to the attack.
Elsewhere, the United States said it's preparing for significant attacks by Iran or its proxies against Israel as soon as this week.
On the economic front, the U.S. Labour Department's report on producer price inflation for July is due later in the day and consumer price inflation on Wednesday.
Both are expected to show a slowdown in the annual rate of price growth, which could provide further impetus for the Federal Reserve to lower rates in light of recent concerns about the outlook for the economy.
The Fed is widely expected to cut interest rates next month, but analysts are divided regarding the probability of a quarter or half point rate cut. Overall, traders are pricing in 100 bps of cuts this year.
Thursday's retail sales numbers, comments from Fed officials and U.K. inflation data and GDP report due on Wednesday and Thursday, respectively may also influence sentiment as the week progresses.
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