Gold inched up on Tuesday bouncing back from a challenging kick off of 2024, as markets reevaluated their projections for an early interest rate cut by Fed prior the significant U.S. inflation figures scheduled to release this week.

Spot gold added 0.2% to $2,032.91 per ounce, meanwhile gold futures advanced by 0.3% to $2,038.85 per ounce.

Over the last week, the gold plunged precipitously below the $2,050 per ounce mark, tracking a rise in the dollar as robust job market data stoked doubts about the degree of pressure on the Fed to start easing policy sooner rather than later.

However, this week's decline in the dollar from three-week highs due to some profit-taking buoyed gold prices somewhat. However the yellow metal was still far off its December peaks.

Ahead of important consumer price index data that is coming this Thursday, traders continued to be strongly biased in favor of the dollar. Together with the positive nonfarm payrolls number, the reading is anticipated to indicate a slight increase in inflation in December, giving the Fed greater leeway to maintain higher interest rates for an extended period of time.