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From here, comments from San Francisco Fed President Mary Daly – the newest voter on the rate-setting committee – may help inform policy speculation and thereby drive gold price action. Follow-through may be limited as traders await the release of minutes from September’s FOMC meeting, due Wednesday

·         The U.S. dollar edged up on Tuesday after it was dented by weak U.S. retail sales data overnight.

The dollar index (DXY), a gauge of its value against six major peers, traded steady at 95.143, gaining 0.09 percent on Tuesday, but off an intraday high of95.37 on Monday prior to release of the retail sales data.

The Japanese yen weakened by 0.19 percent on Tuesday and changed hands at 111.97. The yen had hit a one-month high of 111.61 on Monday.

The euro (EUR=) traded flat versus the dollar at 1.1572, well off a seven-week low of 1.1429 hit last Tuesday.

·         The EU’s Trade Commissioner said on Tuesday that some of U.S. President Donald Trump’s rhetoric was unhelpful while she was trying to make progress in trade talks and said the bloc would have to respond if Washington imposed tariffs on EU cars.

The EU is trying to avert a tariff war with the United States, and Commissioner Cecilia Malmstrom stressed that the two sides were still only at an early stage in talks, working on issues such as how to cooperate on regulations.

·         Off-balance-sheet borrowings by Chinese local governments could be as high as 40 trillion yuan ($5.78 trillion) and amount to “a debt iceberg with titanic credit risks”, S&P Global Ratings said in a report on Tuesday.

·         Investors and economists for months have clung to the hope that rational self-interest would ultimately bring a negotiated end to the United States-China trade war, perhaps even ahead of the U.S. midterm congressional elections next month.

But such optimism is increasingly seen as misplaced as more experts are now bracing for a protracted conflict — with little optimism for resolution.

"When it comes to trade we're starting to get to the point where people are pricing in the worst," Patrik Schowitz, global strategist at J.P. Morgan Asset Management, said Monday on CNBC's "Squawk Box."

"There is quite a lot of talk now that this is going to be a permanent new situation, that we are heading for a new cold war," Schowitz added. "So I think people are starting to price in the worst possible outcome."

·         Saudi Arabia is preparing to acknowledge the death of Saudi journalist Jamal Khashoggi in a botched interrogation, CNN and the New York Times said on Monday, after U.S. President Donald Trump speculated “rogue killers” may be responsible.

Trump dispatched Secretary of State Mike Pompeo to meet King Salman over the case that has strained the Americans’ relationship with the Saudis, carefully cultivated by the U.S. president.

·         At week’s end, global investors and policy makers will likely be given a stark reminder of the costs of a bitter Sino-U.S. trade war, with a Reuters poll predicting that China’s third-quarter growth will slow to its weakest pace since the global financial crisis.

A poll of 68 economists showed gross domestic product likely grew 6.6 percent in July-September from a year earlier, slowing from the previous quarter’s6.7 percent and hitting the weakest pace since the first quarter of 2009.

The predicted third-quarter growth would still be higher than the government’s full-year target of around 6.5 percent.

·         The U.S. government closed the 2018 fiscal year $779 billion in the red, its highest deficit in six years, as Republican-led tax cuts pinched revenues and expenses rose on a growing national debt, according to data released on Monday by the Treasury Department.

·         "Even when U.S. equities were collapsing and there was a risk-off mood in the global markets, the dollar did not trade strong as one would expect," said Ray Attrill, head of currency strategy at National Australia Bank.

"The equity correction is not done... the dollar is behaving in an asymmetric manner - good news is not so good and bad news is much worse in terms of price action for the dollar," added Attrill.

·         Oil prices dipped on Tuesday amid expectations of an increase in U.S. crude inventories, but signs of a fall in Iranian oil exports this month kept losses in check.

International benchmark Brent crude for December delivery had fallen 6 cents, or 0.07 percent, to $80.72 per barrel by 0654 GMT.

U.S. West Texas Intermediate crude for November delivery was down 14 cents at $71.64 a barrel.