Gold rebounds ahead of US inflation data

August gold futures rose 0.7% to $4,033.10 an ounce.

Gold prices rebounded on Tuesday after falling to a two-week low in the previous session, as investors awaited US inflation data later in the day.

Meanwhile, the US dollar index, which tracks the greenback against a basket of six major currencies, edged down 0.1% to 101.16.

The move followed comments on Monday from Federal Reserve Governor Christopher Waller, who said the central bank may need to raise interest rates in the near term if inflation remains well above its 2% target.

Meanwhile, traders increased bets on a September rate hike, with the probability rising to about 76% from 57% a week earlier, according to CME Group's FedWatch Tool, as cited by Reuters.

Investors are awaiting the June US consumer price index (CPI) report later today, with inflation expected to ease, alongside Federal Reserve Chair Kevin Warsh's first semiannual testimony before Congress since taking office.