Gold prices extended gains on Wednesday, as the dollar dipped after U.S. core inflation data came in softer than expected, abating inflation pressures and rekindling expectations that the Federal Reserve's easing cycle may not be over yet.

Consumer price index data for December showed that core price pressures eased more than expected. S&P 500 futures rose as Wall Street weighed the CPI's implications for Federal Reserve policy as well as positive earnings reports from Dow Jones giants JPMorgan Chase and Goldman Sachs.

The consumer price index is expected to show that core inflation ended the year on a bit softer note, but be ready for a disappointment as the S&P 500 tries to get back in rally mode.

A key inflation metric eased for the first time since July as investors debate the Federal Reserve's next interest rate decision.

Progress on inflation should stall this year” as fiscal, immigration and trade policies shift, caution Bank of America economists.

The cost of living rose more in December than the month before, as rising energy costs hurt household budgets and stoked inflation. However, "core" prices were cooler, providing some hope for lower inflation in the coming months.