Gold prices edged higher on Thursday, supported by a weaker U.S. dollar as investors awaited U.S. inflation data that could influence the Federal Reserve’s interest-rate path.
Spot gold rose 0.3% to $4,414.28 an ounce by 04:19 GMT, while U.S. gold futures for December delivery fell 0.1% to $4,457.20 an ounce.
Edward Meir, a metals analyst at Marex, said geopolitical developments in the Gulf were currently a secondary factor for gold. Instead, the precious metal was benefiting from the weaker dollar, which has not risen significantly despite higher U.S. interest rates.
The dollar remained weak, making dollar-denominated metals less expensive for holders of other currencies.
Markets were awaiting the release of U.S. producer price index data at 12:30 GMT, followed by consumer inflation data on Friday, as investors seek clues about the Federal Reserve’s next move on interest rates.
Markets and Economists Diverge on Rates
In a Reuters poll, a majority of economists expected the Federal Reserve to leave interest rates unchanged at its September 15-16 meeting and keep them steady through the end of the year, again contrasting with market expectations for a series of rate hikes.
The CME Group’s FedWatch tool showed traders pricing in roughly a 60% probability of a U.S. rate hike this month.
Higher interest rates typically reduce gold’s appeal because the precious metal does not generate income, making yield-bearing assets relatively more attractive.
Gold is also receiving support from concerns over U.S. government finances.
Daniel Hynes, senior commodities strategist at ANZ, said gold was benefiting as “continued U.S. fiscal pressures undermine confidence in the long-term value of government debt and the currency used to finance it.”
U.S. government debt exceeded $40 trillion for the first time last month, prompting fresh warnings about rising financial risks.
Escalation in Tanker Attacks
On the geopolitical front, Iran said Wednesday that it had attacked 10 vessels near the Strait of Hormuz after the United States sank five Iranian oil tankers, marking the largest wave of reciprocal attacks on shipping since the war began six months ago.
In other precious metals, spot silver rose 0.3% to $67.50 an ounce, while platinum fell 0.4% to $1,888.05 and palladium gained 0.2% to $1,356.20 an ounce.
Source: Agencies
