(Reuters) - Gold prices slipped on Tuesday from a more than five-week high, but held just above the key $1,900 level as expectations grew that the US Federal Reserve would dial back its rate hikes after the collapse of two big regional banks.

Spot gold was down 0.6% at $1,901.91 per ounce, as of 0524 GMT, after rising more than 2% on Monday to hit its highest since Feb. 3.

US gold futures fell 0.5% to $1,907.30. “As the risk environment attempts to stabilise, any less-hawkish rate bets will likely have to seek validation from the upcoming US CPI release, that may trigger some profit-taking into today’s session,” said Yeap Jun Rong, a market analyst at IG.

US officials have announced several measures to limit the fallout from the now-shuttered Silicon Valley Bank, the largest bank failure since the 2008 financial crisis, and restore investor confidence in the banking system. Regulators closed New York-based Signature Bank on Sunday.

Markets are now pricing in a 69.6% chance of a 25 basis-point rate hike at next week’s Fed policy meeting. Considered a hedge against economic uncertainties, zero-yield gold also becomes a more attractive bet in a low interest rate environment.

“The short (-term) outlook for gold looks strong,” analysts at ANZ said in a note, adding that the metal had jumped above its 50-day moving average, signalling a change in momentum. “With investor allocation relatively low, we expect this to continue,” they said.

The US consumer price index (CPI) report due at 1230 GMT will be closely watched for cues on the Fed’s rate-hike plan. “Should the data deliver another upside surprise, the Fed could be more hand-tied in its policy decision, which could see market expectations reverting to a hawkish recalibration,” IG’s Yeap said. 

The dollar index was up 0.3%, making bullion more expensive for buyers holding other currencies. Spot silver fell 0.9% to $21.62 per ounce, platinum lost 0.8% at $988.48 and palladium shed 0.8% at $1,461.76.