Gold held steady as investors prepared for the Federal Reserve's policy decision, a series of key economic data, and the outcome of US trade negotiations.

Gold bullion prices traded in a narrow range on Tuesday after weakening in the previous session amid a rally in the dollar. Although the deal announced Monday between the US and the European Union initially eased fears of a trade war, the asymmetric nature of the agreement has dampened expectations for economic growth outside the US.

With President Donald Trump's August 1 tariff deadline approaching, several other trading partners, including South Korea and Brazil, are still racing to secure agreements. Meanwhile, Commerce Secretary Howard Lutnick said Monday that a 90-day extension of the trade truce between the US and China is a "possible outcome."

Investors are also turning their attention to a series of key indicators this week, ranging from employment and inflation to economic activity, as well as the Fed's policy decision on Wednesday. US central bank officials are expected to keep interest rates on hold, although some committee members may express disapproval of the suspension. Lower borrowing costs tend to benefit bullion, as it doesn't pay interest.

"The three major events of tariff negotiations, the Fed's interest rate decision, and the non-farm payrolls report are underway, likely to amplify gold price volatility," said Dilin Wu, research strategist at Pepperstone Group Ltd., in a note. "Gold is currently at the crossroads of technical and fundamental strength."

Gold has gained more than a quarter this year, with uncertainty surrounding Trump's aggressive efforts to reshape global trade, along with conflicts in Ukraine and the Middle East, prompting a flight to safety. However, the precious metal has traded in a tight range over the past few months after surging to an all-time high above $3,500 an ounce in April.

Spot gold rose 0.1% to $3,317.50 an ounce as of 12:47 a.m. in London. The Bloomberg Dollar Spot Index rose 0.2%. Silver and platinum weakened, while palladium gained. (alg)

Source: Bloomberg