Gold prices inched up on Tuesday as the dollar's rally paused. However, prices held close to a 21⁄2-year low on expectations of further policy tightening by the U.S. Federal Reserve in its efforts to quell soaring inflation. Spot gold rose 0.6 percent at $1,631.89 per ounce, as of 0103 GMT. Prices reach their lowest level since April 2020 at $1,620.20 on Monday. U.S. gold futures edged up 0.3 percent to $1,638.1. The dollar index dropped 0.2 percent easing off a two-decade peak hit in the previous session. Fed officials on Monday sloughed off rising volatility in global markets, from slumping U.S. stocks to currency turbulence abroad. It stated that their priority remained controlling domestic inflation. Rate hikes rise the opportunity cost of holding bullion, which pays no interest, while boosting the greenback. Global economic growth is decreasing more than it was forecast a few months ago in the wake of Russia's invasion of Ukraine, as energy and inflation crises risk snowballing into recessions in major economies, according to the OECD on Monday. China's net gold imports via Hong Kong climbed nearly 40 percent to an over four-year high in August, data showed on Monday, as demand continued to rebound in the world's biggest consumer of the metal. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped 0.40 percent to 943.47 tons on Monday from 947.23 tons on Friday.
