Dollar index
BOJ keeps rates steady
First Fed cut now expected in May with 86 probability IRPR

Jan 23 Reuters Gold prices rose on Tuesday, as the U.S. dollar softened while investors awaited interest rate decisions from the Federal Reserve and the European Central Bank ECB, among others, as well as a slew of U.S. economic data this week.

Spot gold rose 0.5 to 2,030.49 per ounce by 0802 GMT.

U.S. gold futures also rose 0.5 to 2,032.10.

The U.S. dollar index fell 0.2, making greenbackpriced gold more attractive to other currency holders.

Gold is treading water until it gets the next clues as to when the Federal Reserve may pull the trigger on the first rate cut, Tim Waterer, chief market analyst at KCM Trade, said.

The Bank of Japan kept ultralow interest rates intact in a widely expected move, while the ECB meets on Thursday and is expected to hold monetary policy steady.

Fed officials last week said the U.S. central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.

Traders priced in five rate cuts for 2024, down from six cuts two weeks ago. The first cut, initially expected in March, is now expected in May with an 86 probability, according to LSEG39;s interestrate probability app.

Lower interest rates decrease the opportunity cost of holding bullion.

If central banks continue to counter the prevailing narrative that rate cuts will occur sooner rather than…