Gold gains for third session, inflation reports in focus

Gold rose for a third straight session on Tuesday ‌to its highest in more than two months, while investors focused on upcoming inflation data for clues on the US interest-rate outlook.

Spot gold climbed 1% to $4,432.74 per ounce by 0217 GMT, ​hitting its highest level since June 5. U.S. gold futures rose 1.7% ​to $4,492.60.

The move “is being driven by a degree of FOMO (fear of missing ⁠out) from those who missed the dip to $4,000, some short-covering from speculative accounts, ​and a return of safe-haven flows,” IG market analyst Tony Sycamore said.

“In the medium ​term, we do expect prices to break and open the way for a stronger recovery towards $5,000.”

The US consumer price report due on Wednesday and producer price data on Thursday are likely ​to shape monetary policy expectations after weak July U.S. jobs data last week ​led markets to scale back bets that the Federal Reserve would raise rates next month.

At its July ‌meeting, ⁠the Federal Reserve kept rates steady, with three officials dissenting in favor of a hike.

Lower interest rates tend to support gold as bullion pays no interest.

“If the data continue to point towards a cooling economy without a meaningful resurgence in inflation, ​markets could further reduce ​expectations for tighter ⁠policy. That would likely leave the dollar vulnerable and provide another supportive backdrop for gold,” Fawad Razaqzada.

On the geopolitical front, US ​President Donald ⁠Trump responded to Iran’s conditions for a peace deal with his own demands that Iran pay compensation for people killed in wars, attacks and protests, in a rhetorical ⁠escalation likely ​to complicate efforts to reopen the Strait of ​Hormuz.

Among other metals, spot silver rose 0.9% to $66.30 per ounce, platinum gained 0.7% to $1,765.26 and palladium climbed ​0.8% to $1,394.00.