Gold prices inched up in early Asian hours on Tuesday, as the dollar eased off a 20-year high, offsetting pressure from expectations of the U.S. Federal Reserve keeping interest rates higher for longer to combat inflation.

FUNDAMENTALS

Spot gold XAU= ticked 0.1% higher to $1,739.14 per ounce, as of 0058 GMT. Prices hit a one-month low of $1,719.56 on Monday, following Fed Chair Jerome Powell‘s hawkish remarks at Jackson Hole symposium on Friday.

U.S. gold futures GCv1 rose 0.1% to $1,751.7.

The dollar index USD= was off a two-decade high hit on Monday, while the benchmark 10-year yields US10TY=RR pulled back from a two-month high hit in the previous session. USD/

The message from the world’s top finance chiefs is loud and clear: rampant inflation is here to stay and taming it will take an extraordinary effort, most likely a recession with job losses and shockwaves through emerging markets. (Full Story)

While gold is considered a safe bet during economic uncertainty, interest rate hikes increase the opportunity cost of holding the non-yielding asset.

Minneapolis Fed President Neel Kashkari said on Monday he felt the stock market selloff that followed Powell’s hawkish speech on Friday shows investors understand the central bank is serious about reducing inflation. (Full Story)

Markets are now largely pricing in a 75-basis-point rate hike at the Fed’s September meeting.

SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.38% to 980.61 tonnes on Monday from 984.38 tonnes on Friday. (Full Story)

Spot silver XAG= dipped 0.1% to $18.73 per ounce, platinum XPT= fell 0.2% to $862.72 and palladium XPD= rose 0.4% to $2,155.68.