Gold prices rose on Tuesday, as the U.S. dollar softened while investors awaited interest rate decisions from a number of central banks and a slew of economic data in the United States this week.

Spot gold rose 0.5% to $2,030.64 per ounce by 0545 GMT.

U.S. gold futures rose 0.5% to $2,031.90.

The U.S. dollar index fell 0.2%, making greenback-priced gold more attractive to other currency holders.

Gold is treading water until it gets the next clues as to when the Federal Reserve may pull the trigger on the first rate cut, Tim Waterer, chief market analyst at KCM Trade, said.

The Bank of Japan kept ultra-low interest rates intact in a widely expected move. The European Central Bank (ECB) meets on Thursday and is expected to hold monetary policy steady.

Fed officials last week said the U.S. central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.

Traders priced in five rate cuts for 2024, down from six cuts two weeks ago. The first cut, initially expected in March, is now expected in May with an 88% probability, according to LSEG's interest-rate probability app IRPR.

Lower interest rates decrease the opportunity cost of holding bullion.

"If central banks continue to counter the prevailing narrative that rate cuts will occur sooner rather than later, this could pressure the gold price from a yield perspective," Waterer said.

Investors will also be watching out for U.S. flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday and personal consumption expenditures data on Friday, before the Fed's next meeting on Jan. 30-31.

Spot silver rose 1.1% to $22.33 per ounce, platinum also rose 1.1% to $902.36, and palladium rose 0.9% to $944.47.

(Reporting by Harshit Verma in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala)