Gold prices edged higher on Thursday as a weaker US dollar supported bullion, while investors awaited key US inflation data that could influence the Federal Reserve’s interest-rate decisions.
Spot gold rose 0.3% to $4,414.28 an ounce by 0419 GMT. US gold futures for December delivery slipped 0.1% to $4,457.20.
The dollar remained subdued, making dollar-priced gold more affordable for investors holding other currencies. Marex analyst Edward Meir said gold was currently responding more strongly to dollar weakness than geopolitical developments in the Persian Gulf.
US producer price index data is due at 1230 GMT on Thursday, while consumer inflation figures are scheduled for Friday. The reports could provide fresh clues about the Fed’s monetary policy outlook.
According to a Reuters poll, a majority of economists expect the Federal Reserve to keep interest rates unchanged at its September 15-16 meeting and throughout the remainder of the year. Markets, however, were pricing in a 60% probability of a rate increase this month, based on the CME FedWatch Tool.
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Higher interest rates generally weigh on gold because the metal does not generate interest income.
Gold has also found support from concerns over US fiscal pressures and the long-term value of government debt and the dollar, according to ANZ senior commodities strategist Daniel Hynes.
US government debt surpassed $40 trillion last month, raising fresh concerns over the country’s fiscal position.
Geopolitical tensions also remained in focus. Iran said on Wednesday that it had attacked 10 ships near the Strait of Hormuz after the United States sank five Iranian oil tankers, marking the largest reported wave of reciprocal shipping attacks since the six-month-old conflict began.
Among other precious metals, spot silver gained 0.3% to $67.50 an ounce. Platinum fell 0.4% to $1,888.05, while palladium rose 0.2% to $1,356.20.
