Gold prices fell slightly on Tuesday after a strong run-up in recent sessions, while a rebound in the dollar also pressured prices ahead of more upcoming economic data and signals from the Federal Reserve.

The yellow metal benefited from increased safe-haven demand in recent sessions, amid an escalation in military action in the Middle East. A softer dollar also benefited bullion prices.

But the dollar rebounded on Tuesday, as markets hunkered down before addresses from Fed officials this week, which are expected to offer more cues on when the central bank will begin trimming interest rates this year.

Spot gold fell 0.3% to $2,049.41 an ounce, while gold futures expiring in February fell 0.3% to $2,052.90 an ounce by 23:35 ET (04:35 GMT).

Fed officials, economic data in focus for rate-cut cues

The dollar index surged 0.5% on Tuesday, with demand for the greenback increasing ahead of an address by Fed Governor Christopher Waller later on Tuesday. His comments on the potential for a spring rate cut will be closely watched, after consumer and producer inflation data for December offered somewhat mixed cues to markets.

U.S. industrial production and retail sales data readings are due on Wednesday and are set to provide more signals on the economy. Any signs of economic resilience gives the Fed more headroom to keep rates higher for longer.

Traders were seen slightly trimming bets on a March 2024 rate cut, according to the CME Fedwatch tool. Expectations of early interest rate cuts were a key driver of a gold rally in recent weeks, given that the yellow metal benefits from a low-rate environment.

Copper slips ahead of more China cues

Among industrial metals, copper prices fell on Tuesday, coming under pressure from a stronger dollar and as traders positioned for more cues from the world’s largest copper importer this week.

Copper futures expiring in March fell 0.7% to $3.7572 a pound.

China is set to release fourth-quarter gross domestic product figures on Wednesday, capping off a year of languid economic activity. While GDP is still set to exceed the government’s 5% annual target, the rise is largely driven by a lower base for comparison from 2022.

Chinese industrial production and retail sales readings are also due on Wednesday.

Concerns over China were a key weight on copper prices over the past two years, as markets feared that cooling growth in the world’s largest importer will dent demand for the red metal.

With the Chinese economy showing little signs of improvement in recent months, this trend is expected to persist. But copper prices may see some strength from increasing demand from other sources, particularly a push into green energy.